‘This was a necessary decision. Nestlé’s values and governance are strong foundations of our company.’
Swiss multinational food and drink company, Nestlé, has fired its CEO, Laurent Freixe, after an investigation that revealed he was in a romantic relationship with his direct subordinate.
Nestlé announced the news on Monday, and following multiple media reports, the company’s share price declined by 0.95% on Tuesday.
The company said the romantic relationship was a breach of Nestlé’s Code of Business Conduct. It is unclear if the other person involved was also fired.
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Nestlé’s investigation
According to the company’s media statement, the investigation was overseen by Chairman Paul Bulcke and Lead Independent Director Pablo Isla, with the support of independent outside counsel.
“This was a necessary decision. Nestlé’s values and governance are strong foundations of our company. I thank Laurent for his years of service at Nestlé,” said Bulcke.
Freixe was with the Swiss company for at least 40 years, and he took over as CEO from Mark Schneider in September 2024.
Nestlé’s new CEO
The board has appointed Philipp Navratil to succeed Freixe. He began his career with Nestlé in 2001 as an internal auditor.
“I am pleased to announce Navratil as CEO. Philipp is recognised for his impressive track record of achieving results in challenging environments.
“The board is confident that he will drive our growth plans forward and accelerate efficiency efforts. We are not changing course on strategy, and we will not lose pace on performance,” said Bulcke.
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Navratil’s track record
Navratil has held various roles in the company, including Country Manager for Nestlé Honduras in 2009.
In 2020, he transitioned to Nestlé’s Coffee Strategic Business Unit, where he was responsible for shaping the global strategy and driving innovation for Nescafé and Starbucks coffee brands.
“I am honoured by the trust the board has placed in me, and it is a privilege to take on the responsibility of leading Nestlé into the future. I fully embrace the company’s strategic direction, as well as the action plan in place to drive Nestlé’s performance,” said Navratil.
Nestlé is the parent company of more than 2 000 brands, including Nescafé, KitKat, Smarties, and others.
Risks of workplace romance
There are no laws preventing colleagues from being in romantic relationships.
However, companies are usually against it because several risks are associated with it, especially when it involves a boss and a subordinate.
One Legal listed seven types of risks associated with office romance. These include sexual harassment claims, conflicts of interest, vicarious liability for the employer, retaliation claims, wrongful termination claims, ethical concerns and reputational damage.