Unilever and the confused priorities of the Davos elite

 
John Hulsman
Business And Political Leaders Attend Clinton Global Initiative Annual Meeting
In the wake of the crash caused by many of his Davos colleagues, Polman has earnestly called for “a better form of capitalism”. My gentle suggestion is that Unilever deserves a better form of capitalist (Source: Getty)

If Angela Merkel epitomises the overrated in terms of international statesmanship, her equal in corporate terms must be Paul Polman of Unilever.

As is true with the German Chancellor, it is unfathomable to me that the leader of a major corporation with a record this hapless should be lionised. For the larger point is that both are symbols of a world that has forgotten that, in healthy societies, recognition must coincide with a record of real accomplishment.

In Polman’s case, his peculiar talent is to perfectly talk the talk of Davos Man, the globe elite who – despite overseeing foreign policy disasters in Iraq and economically running the world into a ditch post-Lehman – somehow still think they are the repository of global governance wisdom. Since taking over Unilever in 2009, Polman specifically has talked sonorously about water conservation and the dangers of global warming, decreasing the Anglo-Dutch company’s carbon footprint, using more sustainable materials in making the Dove soap and Lipton tea that are two of Unilever’s core brands, and promoting global health.

All of these are worthy causes, and if I were looking for the new head of Oxfam I might well consider Polman for the job. The problem is that a fixation on these societal goods does not necessarily dovetail with the passionate commitment to maximising shareholder value that is the ultimate moral duty of any company chief.

In line with the general philosophical confusion of much of the Wilsonian centre-left, Polman ignores the fact that, in the real world, trade-offs among positive goals are merely a fact of life. When asked how much time he spends on specific Unilever business compared with cajoling politicians around the world to sign onto the Davos wish list, Polman tellingly has replied, “To me it is the same. I don’t separate that.”

Read more: Unilever explores £6bn sale of brands such as Flora after Kraft Heinz saga

But of course it is not the same. By refusing to prioritise between maximising shareholder value and saving the world, Polman is likely to do neither. For a man who loves everything loves nothing and helps nothing. Life is about priorities, about making choices, not ducking them.

Of course, setting the bar so morally high also leaves you open to endless charges of hypocrisy. In Unilever’s case, its global reach has, under Polman’s watch, led to it reaching a settlement over allegations of mercury poisoning in India, while being accused of monopoly practices in South Africa, being too slow to halt sexual harassment on its tea plantation in Kenya, and poor labour practices in Vietnam. While Unilever has moved to correct the abuses, in practical terms the company can never be as saintly as Polman’s rhetoric.

But it is Polman’s business record that is perhaps the greatest cause of concern, flowing as it does from his confused all-things-to-all-men Davos philosophy. Banishing reporting of quarterly profits (I would too if my record were as poor as his), Polman urges the world to take the long view. Let us take him at his word.

In the 12 months to 15 February 2017, just before Kraft Heinz announced a $143bn takeover bid, Unilever’s share price rose some 10 per cent. The wider FTSE 100, however, soared by some 28 per cent. In the fourth quarter of 2016, meanwhile, Unilever’s sales missed expectations globally, while falling by 2.3 per cent in Europe, with many forecasters expecting even worse times ahead in 2017. Defending these poor recent results, Polman blamed the “shock” of Brexit, wherein the pound fell by 20 per cent against both the euro and the dollar. He also pointed to Prime Minister Modi’s “surprise” anti-corruption campaign, where the Indian government withdrew 500 and 1,000 rupee notes, which undercut Unilever’s business there.

Read more: Unilever investors are gunning for it to be broken up

But as regular readers of this column well know, neither of these events should have been surprising (as they have not been to me), and the possibility of both should at a minimum have been planned for. Instead of doing this, the lure of attending another development conference with the great and the good seems to have been too much of a temptation for Polman. For he has certainly taken his eye off the analytical ball.

There are only so many hours in the day. And where you put your time in life, there also shall be your treasure. Polman – mindlessly lauded by the financial elite – has made it unambiguously clear where his priorities lie. He has straightforwardly said, “I am really more interested in development”. There is nothing at all wrong with this. But it is not overmuch to point out that a company as important as Unilever (with 168,000 employees in 2016) deserves a full time chief executive.

In the wake of the crash caused by many of his Davos colleagues, Polman has earnestly called for “a better form of capitalism”. My gentle suggestion is that Unilever deserves a better form of capitalist.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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