Milt Moskowitz: Sanity in an Insane World from Paul Polman, the CEO who is Reshaping Unilever
Everyone complains about the short-term thinking that rules financial markets these days, but no one ever does much about it. Until now.
Stepping up to the plate is Unilever, the storied Anglo-Dutch supplier of food, beverage and personal care products, sold under some 400 brand names including Lux, Dove, Hellmann’s, Ben & Jerry’s, Lipton, Knorr, Bertolli and Vaseline.
In a far-ranging interview with Adi Ignatius, editor in chief of the Harvard Business Review, CEO Paul Polman spelled out the steps Unilever is taking to become a sustainable corporation.
I have seen many mission statements in my time. It’s easy to craft one. But Unilever’s words are coupled with actions. For example, under Polman’s leadership the company has done away with quarterly reporting and earnings guidance. Instead it reports financial results twice a year — and it doesn’t speculate about where profits are going to come in.
Unilever thus does not participate in the quarterly lunacy that pervades Wall Street, where analysts shoot down a company for not meeting expectations or pump up a company for beating estimates. It’s a game myopic in its narrow short-term perspective. Ideal for hedge fund managers who trade in and out stocks on a daily basis.
Indeed, here is what Polman has to say on this subject: “We tell hedge funds and short-term speculators, ‘You don’t belong in this company. The sheer fact that you buy a few shares doesn’t give you the right to mess up our strategy.’ We don’t condemn them, but they can go somewhere else.”
Unilever rang up revenues of $64 billion last year, ranking it 139th in the world, squeezed between Johnson & Johnson and State Farm Insurance. Polman’s goal is to double that total by 2020 while reducing environmental impacts by 50%. The company has established 50 measurable goals throughout its supply chain “to reduce our overall environmental footprint, source our agricultural resources sustainably and help one billion people get access to nutrition and achieve well-being.”
Why do this? Polman’s answer: “We thought about some of the mega-trends in the world, like the shift east in terms of population growth and the growing demand for the world’s resources. And we said, ‘Why don’t we develop a business model aimed at contributing to society and the environment instead of taking from them.’”
Polman’s 2010 compensation was $2.8 million euros, well under what his peers at Procter & Gamble, Kraft and Nestle earned.
P.S. A must read for anyone in the SRI community is a new book, “Owning Our Future,” by Marjorie Kelly, co-founder and longtime editor of Business Ethics magazine. It’s a brilliant analysis of the underlying causes of our financial crisis and rather than despairing, it points the way out through new forms of ownership. An inspiring book, just what the doctor ordered for our illness.
Milton Moskowitz is a journalist and author, who began publishing the newsletter, Business & Society, in 1968. This publication later evolved into the journal, Business and Society Review, where he served as senior editor for 25 years. Mr. Moskowitz has written or co-authored seven books including The 100 Best Companies to Work for in America, which manifests itself today as an annual survey in Fortune magazine. The Moskowitz Prize, which is awarded annually at the SRI Conference to the most outstanding quantitative work in social investing, is named for Mr. Moskowitz.