Nestle(US:NSRGY) Guan Cha Zhe Wang·2025-09-02 12:24Core Viewpoint - Nestlé Group's sudden dismissal of CEO Laurent Freixe due to a violation of the company's code of conduct has raised concerns about internal management and corporate governance, prompting a reevaluation of the company's future strategic direction [1][2][3] Group 1: Executive Changes - Laurent Freixe, a veteran with 39 years at Nestlé, was appointed CEO in September 2024 but was dismissed within a year due to an undisclosed romantic relationship with a subordinate [2][3] - The board's decision reflects a commitment to uphold corporate governance standards, emphasizing that even high-ranking executives are not above the rules [2][3] Group 2: Investigation and Governance - An internal investigation was initiated following multiple anonymous reports received through the "Speak Up" system, leading to the board's decision to terminate Freixe [3] - The board, led by Paul Bulcke and independent director Pablo Isla, underscored the importance of maintaining the company's values and governance as a foundation for its operations [3] Group 3: New Leadership Challenges - New CEO Philipp Navratil faces significant challenges, including stabilizing the organization, continuing performance improvement plans, and restoring ethical authority within the executive team [4][5] - Navratil, a long-time Nestlé employee, has expressed full support for the company's strategic direction and aims to accelerate value creation initiatives [6] Group 4: Financial Performance Context - Nestlé's financial performance has been under pressure, with a reported sales decline of 1.8% to CHF 44.228 billion and a net profit drop of 10.3% to CHF 5.065 billion in the first half of 2025 [5] - The Greater China region specifically saw a sales decline of 6.4% to CHF 2.47 billion, raising concerns about the effectiveness of previous strategic initiatives [5]