Anonymous Hotline Tip Sparks Dismissal of Nestle CEO
Nestlé announced on Tuesday the immediate dismissal of its chief executive, Laurent Freixe, following an internal investigation that revealed he had not disclosed a romantic relationship with a direct subordinate, which constitutes a breach of the company’s code of conduct. Philipp Navratil, a seasoned executive at 49 years of age, has taken on the role of CEO. Navratil, who became part of Nestlé in 2001, most recently directed the Nespresso division and has occupied senior positions throughout Central America and within the company’s coffee sector.
Chairman Paul Bulcke stated, “This was a necessary decision,” highlighting that the core values and governance of Nestlé continue to serve as its strongest foundations. Freixe was removed from his position after an anonymous tip was submitted to Nestlé’s internal hotline, ‘Speak Up’, which reported a relationship with a marketing executive who was under his direct supervision. The pair initially denied any relationship. Nestle’s decision underscores the principle that no employee is above company rules. Last year’s reports received via the ‘Speak Up’ line resulted in over 100 staff departures. According to the company’s policy, employees are mandated to disclose personal relationships in order to avert potential conflicts of interest. A recent news report highlighted that in 2024, Nestle faced more than 3,000 conduct reports, with 644 cases substantiated and 119 employees departing as a consequence.
Navratil is now confronted with the task of stabilizing the company, tackling a prolonged decline in share prices, and rebuilding confidence following a succession of executive exits. Although he has not spearheaded a significant regional initiative akin to his predecessor, Navratil has committed to maintaining Freixe’s strategic course. Investor scepticism looms over workplace relationships. Freixe’s departure aligns with a trend of high-ranking executives exiting as a result of relationships that violate company policies, a situation reminiscent of BP CEO Bernard Looney and Kohl’s CEO Ashley Buchanan. In Europe, workplace relationships have historically been kept under wraps; however, the #MeToo movement has intensified scrutiny surrounding these dynamics. Experts indicate that these occurrences could impact investor confidence. “This is unlikely to restore trust in the company,” remarked Jean-Philippe Bertschy of Swiss firm Vontobel, according to the news report.
Freixe, 63, has been with Nestlé since 1986 and took on the role of CEO in September 2024. In his short time in the role, he concentrated on key brands including Nescafé, KitKat, and Fancy Feast, implementing cost-cutting measures to funnel resources into products like cold coffee while also bolstering the executive team at the Lake Geneva headquarters. He had previously criticized his predecessor, Mark Schneider, for what he termed over-diversification, and made the decision to relocate regional business heads to Switzerland, a move that sparked internal debate.
