Nestlé chief executive Peter Brabeck will tighten his grip on the multinational's strategic leadership, taking on the additional role of chairman.This content was published on January 18, 2005 - 10:24
The Vevey-based food giant said on Tuesday that Brabeck would replace Rainer Gut, who is to step down at the annual shareholders meeting on April 14.
“Taking into consideration the importance of strategic continuity and long-term value creation, as well as the present composition of the board of directors and the executive board, the board members decided to entrust the function of chairman and CEO to Mr Peter Brabeck,” Nestlé said in a statement.
“To maintain the necessary checks and balances, two vice-chairmen of the board will be elected.”
The announcement caused no surprise in business circles.
Analyst James Amoroso of private bank Pictet said it had been widely expected. “It’s a logical step,” he told swissinfo.
"For me, the role of chairman is more of a label, because Peter Brabeck has been steering the strategy of the company very tightly ever since he became CEO.”
Amoroso said shareholders were unlikely to be too troubled by the announcement.
"In terms of strategy - which I think is what most investors would be concerned about - it's Brabeck's strategy anyway."
"I don't know of anyone else in the food industry who could do a better job of guiding the strategy of Nestlé," he added.
Nestlé named Andreas Koopmann, a member of the board since 2003, and Rolf Hänggi, who joined the board last year, as the two vice-chairmen.
Amoroso said that while it was somewhat out of the ordinary to have two vice-chairmen, the decision made good sense in the light of Brabeck’s increased responsibilities.
"It's not usual but it's a good safety net, if only to appease investors who have an aversion to double mandates."
Founded in 1866, Nestlé is the world's biggest food concern and the largest industrial enterprise in Switzerland.
The company has its headquarters in Vevey.
Nestlé operates 511 factories and employs 253,000 workers.
In the 1970s, Nestlé was widely criticised over its expansion in the developing world.
Since then it has improved its public image and changed some of its practices.
But this year Nestlé was among a number of firms nominated by Swiss NGOs for the "Public Eye Awards" for irresponsible corporate behaviour.
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