Nestlé drew his CEO dressed in scandal without payment – a “really unusual” move, says an expert

According to the company’s veteran, Nell Minow, this is almost unknown in the following C.

“”It’s really unusual, ”she said Fortune. “I think it is in fact a success badge for corporate governance, because it is something that investors have been concerned for a long time: CEOs are rejected and which can somehow stay.”

Nestlé confirmed Fortune This Freixe will not receive dismissal.

For years, high -level executives who have crossed the ethical lines left with several million dollars parachutes. Famous, Steve Easterbook, the former executive of McDonald’s, has moved away from the role with a heavy sum of $ 40 million after being surprised having a consensual sex with a subordinate. McDonald’s recovered $ 105 million from Pastebook after finding that he had not disclosed sex with other subordinates from the fast food giant.

Adam Neumann – After having directed a disastrous accusation to take the company he founded, WeWork, public – received $ 445 million in a payment pack during his evidence. And after 346 people died in two accidents during the term of Dennis Muilenburg as CEO, he did not receive dismissal, but he has always found himself with more than $ 60 million in his pocket other share purchase options.

Minow said that these different results show that the boards of directors are not always consistent in the way they have taken the police, but said that a thing remains consistent: social media have left the directors with fewer options to look in the other direction.

“There has been bad behavior in the conference room for a long time,” said Minow. “But in part because of social media, in part because of the way things go out, the board of directors is subject to more pressure to respond.”

The remedies of the reputation of the wrong behavior can be brutal. A Polish CEO who has recently been taken on video, tearing a hats from US Open from a child watched the online criticisms of his business collapse near zero in days. Papa Johns’ John John brought the Major Baseball League to promote it with the pizza chain after saying the word N during a media training call in 2018.

The boards adapt slowly, explained Minow. Some have started to amortize bonuses or move more quickly to terminate the CEOs “for good”, which means that the executive in question has committed a serious misconduct which justifies the dismissal without any starting indemnity. But she warned that many still demonstrated a double standard.

“If you see hypocrisy on the board, by the way they manage the CEO in relation to the way they manage an intermediate manager, it is a green light for employees to behave badly themselves.”

Even the apology, she said, operates as a governance test. Minow keeps what she calls an informal “temple of shame” of the excuses of bad executives. The worst, she explained, dodges the responsibility or does not show how the company will prevent a rehearsal. The best are frank, fast and supported by action.

In the end, Nestlé’s decision can be a turning point. By refusing to Freixe a golden parachute, the Swiss food giant noted that the advice began to deal with the risk of reputation as seriously as the financial risk, and that the missteps at the top no longer guarantee a comfortable landing.

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