Sometimes it may be the responsibility of the Corporate Committee to determine that even if the executives are doing a good job, they may not perform well. That was the case at Unilever. Unilever decided to expel current CEO Hein Schumacher in less than two years of work and replace him with CFO and executive director Fernando Fernandez. The move seemed to surprise almost everyone.
Unilever, the parent company of over 400 brands, including Dove Soap, Ben & Jerry ice cream and Hermann mayonnaise, is in the middle of a turnaround strategy that devised to address the inadequate performance of the company's years prior to his appointment in July 2023. They demand a faster pace.
In a statement, Unilever Chairman Ian Meakkins said: “On behalf of the Board, I would like to thank Unilever for resetting their strategy, about the focus and discipline he brought to the company, and steady financial advances in 2024.
“The board is pleased with Unilever's performance in 2024, but there's more to deliver best-in-class results. The board, which has worked closely with Fernando for the past 14 months, is extremely confident in its ability to lead a highly-performing management team. [Growth Action Plan] Urgently, it provides the shareholder value that the company's potential demands. ”
According to news reports, Schumacher, who was an outside employment, resigned as CEO and executive on March 1, 2025 by mutual agreement. After working at Unilever for nearly 40 years, including taking on positions as Latin American President, Brazilian President, CEO, Philippines and Unilever CFO, Fernandez has taken additional responsibility within the past 14 months.
The Unilever Committee's decision to remove highly regarded CEOs who have produced aggressive growth performance in under two years emphasizes that pressure directors will select CEOs who can produce performance that outperform their competitors in a record time. In an environment where multiple activist investors may be included as the largest shareholder of a company, good performance may not be sufficient. With that in mind, board members may want to consider the following questions:
Can your board make decisive calls like Unilever's board of directors? The act of removing a CEO is strict enough, without justifying the removal of a relatively successful CEO in the first two years. However, removing this CEO appears to have been based on the perception that more urgency could apply to conversion efforts.
What Unilever's decision may indicate is that the standards for growth for companies are changing, and what was once accepted may not be accepted in the future. Because making changes in many different jurisdictions can be challenging for global companies, Unilever's board of directors did not hesitate to move to leaders demonstrating their ability to make changes at faster rates. This dynamic could apply to all future companies.
Speaking about Fernandez in a company statement, Unilever Chairman Meekins said, “The board was impressed with Fernando's decisive and outcome-oriented approach and his ability to promote change with speed. The board has made the decisive decision to promote change at a faster rate.
Can the board succession planning process put the company in a position to upgrade CEOs if necessary? Unilever's board of directors was in a great position to make the CEO shift. Because there are internal candidates with solid experience in the company and are given the extra responsibility to prove he has the skills necessary to improve the company's growth at the pace the committee prefers. The board is recommended to consider whether it has an effective internal system to develop CEO candidates with the skills to guide the company into the future. A system should also be implemented to identify external candidates who own the same leadership qualities. By implementing this type of succession planning process, the board can make the decisive decision to change the CEO if circumstances direct it.
Is your board clear about the standards for your CEO's performance? Because CEO performance expectations are very different, it is important that the board is on the same page for the level required to achieve the company's supervision and level of financial growth to succeed. It may be a good time for the board to rethink what level of productivity the current CEO expects and whether the criteria are appropriate for the company's resources, the current economic environment, and whether the expectations of corporate stakeholders and investors. Reestablishing performance with CEO and management teams can clarify the company's goals, clarify which executives are responsible (and rewarded), and provide insight into how receptive the management team is to board supervisory responsibility.
