Danone to pioneer Entreprise à Mission model as CEO takes pay cut
The board of directors of Danone met this week to agree arrangements and proposed resolutions for the 2020 AGM, which will be held on June 26, in closed session due to the coronavirus pandemic.
The board will recommend at the AGM that Danone becomes the first listed company to adopt the ‘Entreprise à Mission’ model created by French law in 2019. This will embed the legal “entreprise à mission” framework within its articles of association (including a purpose) and apply a new governance arrangement to oversee the progress of its environmental, social and societal goals.
The board also accepted CEO Emmanuel Faber’s proposal to reduce by 30% his fixed remuneration for the rest of year 2020 with effect from July 1, 2020 and the members of the board of directors decided to give up their entire compensation for the second half of 2020, in order to allocate the corresponding amounts to the financing of Dan’Cares program in favor of the expansion of Danone employees’ health coverage.
Danone launched the Dan’Cares program in 2010 with the objective to offer health coverage and health education to every employee.
Faber said, “We are on the threshold of a time when what we mean by “in the ordinary course of business” will change forever. This is an extraordinary moment. Putting the DNA of Danone at the heart of our articles of association by becoming an Entreprise à Mission may be a natural step for us. But it could not be timelier and more meaningful, as employees, consumers, customers, partners, governments and shareholders now see the critical importance of a balanced multi-stakeholder approach to value creation and sharing.
“We made an unequivocal choice to protect our whole business ecosystem during the current entry phase into what will be a radically new operating environment, while we are witnessing sanitary scenarios unfolding, gradually assessing how they will impact the way people live and work, and before we then start our own preparation for long-term adaptation.
“I am convinced that becoming an Entreprise à Mission will meet our objective to serve, in a fair and transparent manner, everyone in our business ecosystem, and therefore create for Danone a consistent and efficient framework for how we will create resilient, and therefore sustainable, value in this new world.”
Faber said the move will support the company’s objective to be the first large company to achieve, in five years, global B Corp status.
“Namely that all our businesses and brands are seen in the eyes of consumers, and of all Danone stakeholders, as serving society’s and people’s interests,” Faber said.
“This too is an energizing opportunity to engage further with our shareholders about the fit between our integrated goals for 2030 and their more than ever increasing ESG agendas.”
Entreprise à Mission model
Introduced in France in 2019 with the Pacte law, an entreprise à mission company is defined as a company whose purpose, and whose objectives in the social, societal and environmental fields aligned with this purpose, are set out in its Articles of Association. It is not a new legal form. The aim is to ensure that the purpose of the company is fixed on long-term objectives which are described in the company’s Articles (the Mission).
The Articles specify the means by which the execution of the Mission will be monitored, under the control of a Mission Committee, which is distinct from the Board Committees and which must include at least one employee. An independent third party verifies the execution of the Mission, and establishes a written opinion annexed to the report of the Mission Committee to shareholders and made available on the internet site of the company for a period of five years.