At Nestlé's 2005 annual general meeting, Ethos and five pension funds submitted three shareholder resolutions aimed at bringing about an improvement in corporate governance. In response to the considerable support received by the resolution requesting the separation of the positions of Chairman and CEO (36% of the votes cast), Nestlé decided to ask the opinion of its 250,000 shareholders regarding various aspects of the company's corporate governance. The answers received prompted the Board of Directors to conduct an in-depth revision of the company's articles of association. The revised articles will be submitted to the shareholders for approval at the Annual General Meeting scheduled for 10 April 2008. Three years after the historic 2005 vote, this marks a milestone in shareholder democracy.
Nestlé's Board of Directors also decided to separate the positions of Chairman of the Board and CEO. Thus, as of the 2008 general meeting, Peter Brabeck will concentrate on his duties as Chairman, while Paul Bulcke will become CEO.
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Purpose of the company (art. 2)
The revised articles specify that “Nestlé shall, in pursuing its business purpose, aim for long-term, sustainable value creation”. This is a welcome addition, even though the concepts of sustainable development and social and environmental responsibility are not explicitly mentioned. -
Right to submit a resolution (art. 9)
The threshold for requesting that an item be included on the agenda of the annual general meeting has been lowered from 0.25% to 0.15% of the share capital. This is in keeping with the spirit of one of the resolutions submitted by Ethos in 2005. -
Registration limit (art. 11)
The voting rights' limit has been raised from 3% to 5% of the share capital. This is a step toward improving shareholder rights. -
Special quorum (art. 13)
The special quorum requiring the affirmative vote of two thirds of the total share capital has been replaced by a quorum of two thirds of the votes represented. This is an important measure that allows decisions to be taken when a large part of the share capital is not registered and therefore does not vote at annual general meetings. -
Term of office of members of the Board of Directors (art. 15)
The term of office of members of the Board has been reduced from five to three years, another modification requested in 2005 in one of the Ethos resolutions. -
Term of office of the auditors (art. 20)
The term of office of the auditors has been reduced from three years to one, consistent with the relevant international best practice.
