At the Annual General Meeting of Nestlé held today in Lausanne, 98.12% of the shareholders represented approved the proposal to mandate the Board of Directors to prepare a global revision of the company’s Articles of Association. In principle, the proposed amendments will be put to shareholder vote at the 2007 general meeting.
Ethos actively endorsed the proposal, which was made in the wake of the strong support expressed for the three shareholder resolutions presented by it and five pension funds last year aiming to enhance corporate governance at Nestlé. As yet, however, no detailed information has been provided on the extent of the amendments planned.
As concerns corporate governance specifically, Ethos hopes that the amendments will go further than the questions that emerged from last summer’s survey, i.e. a reduction in the terms of office of board members and the suppression of the 3% registration limit. In particular Ethos would like Nestlé’s Articles of Association to stipulate that shareholders should cast an advisory vote on the remuneration policy for board members and top executives, as recommended in the OECD’s Principles of Corporate Governance.
Regarding Nestlé’s environmental and social responsibility, Ethos proposes that a paragraph be added to the article defining the company’s purpose, to specify that “Nestlé strives to conduct its activities in a financially, socially and environmentally responsible manner”. A similar sentence has already been incorporated, for example, into the Articles of Association of the healthcare company Novo Nordisk. It would allow Nestlé to proclaim its unequivocal commitment, not only to corporate governance best practices, but also to the concept of sustainable development.
In the course of its ongoing dialogue with Nestlé, the Ethos Foundation will continue to show that it attaches great importance to Articles of Association that guarantee compliance with corporate governance best practices and with the requirements of a socially responsible company.
