Swiss food giant Nestlé has fired its Chief Executive Officer, Laurent Freixe, after an internal investigation confirmed he had an undisclosed romantic relationship with a direct subordinate a breach of the company’s code of conduct.
The board stated that it appointed Philipp Navratil, the CEO of the Nespresso unit and a Nestlé veteran, as Freixe’s successor with immediate effect.
The decision, headed by Chairman Paul Bulcke and Lead Independent Director Pablo Isla, follows weeks of investigation. The matter of Freixe’s conduct was originally raised through Nestlé’s internal hotline early this year. Although an initial investigation proved inconclusive, a second investigation involving an external firm confirmed the relationship. Freixe had originally denied the allegations when confronted by the board.
This was a necessary decision,” Bulcke stated in a release. “Nestlé’s governance and values are the pillars of our company. I thank Laurent for his years of service.”
The abrupt upheaval comes at an inopportune time for Nestlé, as it grapples with a challenging consumer backdrop and escalating U.S. trade tariffs. It also marks the second consecutive year of leadership tumult, following the ousting of Freixe’s predecessor, Mark Schneider, and is sparking concerns about upper-level instability.
The event adds to a growing list of corporate governance scandals at multinationals. Recent weeks have witnessed Kohl’s terminate CEO Ashley Buchanan over a conflict of interest with a supplier, and Astronomer CEO Andy Byron resign after being videotaped with a junior staff member.
Analysts at JPMorgan warned the sudden change could undermine investor confidence, as it “keeps afloat questions about the company’s mid-term direction.”
Despite this, Nestlé underscored its priority on strategic goals. Navratil, who joined the company in 2001 as an internal auditor, has climbed steadily through the ranks, with leadership roles in Honduras, Mexico, and Nestlé’s global coffee business before heading Nespresso.
Bulcke, meanwhile, is set to retire as chairman next year a move sure to fuel further speculation about Nestlé’s future course and leadership.
