• Nuno Moreira da Cruz

Unilever’s CEO departure: The chicken and egg dilemma


October 9th 2022


Unilever announced this week the departure of its CEO Alan Jope. The announcement was made well ahead of its effective date (Dec. 31, 2023) but it comes at a time when his purpose-driven approach to management was being contested. Two contested decisions in the past year shook investors’ confidence in Jope: (i) the first was Unilever’s failed £50 billion (then $68 billion) bid for GlaxoSmithKline’s consumer health care arm and (ii) the second was Unilever’s decision to sell its Israeli Ben & Jerry’s operations, torpedoing plans by the ice cream maker’s management to stop selling products in Palestinian occupied territories. Put it simple: neither profit or purpose.

The reality is that, GSK and Ben & Jerry’s decisions aside, Unilever stock under Jope essentially flatlined, while its two big competitors, P&G and Nestlé, recorded stock gains of 47% and 33%, respectively, over the same period. As analyst Alan Murray put it, Jope’s departure is also another reminder that “you have to have purpose PLUS profit”. Terry Smith, one of the top shareholders went further: “Unilever’s management had been obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business”.

Faced with the recent setbacks, Jope chose to end on a rather conventional note in his parting press release, saying “growth remains our top priority, and in the quarters ahead I will remain fully focused on disciplined execution of our strategy.” Whether it was his decision to retire earlier or having been “invited” to retire earlier, the fact is that this move is very similar to what happened to Danone´s CEO Emmanuel Faber 18 months ago, where shareholders made a clear statement “we fully support your sustainability-purpose-driven strategy, but your competitors, with the same sort of strategy, are doing better”.

In a nutshell: Purpose, yes, but as long as there are profits. Which is obvious and no one should expect anything different from shareholders. Nor should it raise alarms on those defending stakeholder capitalism. As our mantra goes: without profit there will hardly be any concerns with social and environmental issues. Yes, but…without dealing with social and environmental challenges there will hardly be any profits in the future!

This is, and will be for the foreseeable future, the chicken & egg dilemma that CEOs like Jope and Faber will have to manage.


Nuno Moreira da Cruz

Executive Director

Center for Responsible Business & Leadership