- UnileverCEO Paul Polman spoke at the CECP‘s CEO Investor Forum in February about the need for prioritising long-term value.
- He said that while he’s seen progress over the last decade, he has yet to have an investor ask him on an earnings call about topics like sustainability or diversity.
- He said his 10-year plan has been for the purpose of keeping Unilever healthy and relevant for years to come.
- This post is part of Business Insider’s ongoing series on Better Capitalism.
As soon as Paul Polman became Unilever’s CEO in January 2009, he scrapped earnings guidance from quarterly reports. That meant that the British-Dutch consumer goods giant would no longer provide its investors with predictions for future earnings.
That was because he was going to dedicate Unilever to long-term value. At the CECP’s CEO Investor Forum in February, Polman said – only half joking – that he felt empowered to make this decision immediately because, “My simple point was the day they are hiring you, they are not going to fire you.”
He said he revamped the company’s strategy and moved its compensation system to the long term, and that he was going to act on his own terms. “I also discovered indeed, that it’s easier to get rid of shareholders by disinviting than to attract new ones. But over time, I figured, if you perform the numbers will talk and the right people will be attracted to your company.”
He added, however, that there is still room for improvement in the way the investing community sees the role of public companies in society. Polman said that in nearly a decade of serving as CEO, he has never had a sell side investor ask him a question about Unilever’s strategy around climate change, diversity, or human rights. “None. It doesn’t seem to matter.”
Polman’s defining initiative has been the 10-year Unilever Sustainable Living Plan, which has included significant changes such as having 100% of agricultural raw materials be sustainable by 2020, developing a framefork for fair pay, and investing heavily in hygiene promotion in developing markets like India.
At the CECP summit, Polman explained that he didn’t want to be seen as “courageous” because he was simply doing what it took to develop Unilever as a business that could provide employees and future employees with a purpose to engage, customers with healthier products, and communities in which it does business with reasons to support it.
The plan may not always please short-term investors, but it was a necessary one to maintain years of growth and relevancy, he argued.
“Business needs to be an active contributor to finding the solutions that have an impact on society,” he said. “After all, if business cannot show what positive impact it has, why should the citizens let this business be around?”
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