Emmanuel Faber
| Emmanuel Faber | |
|---|---|
 | |
| Born | January 22, 1964 (age 62) Grenoble, France |
| Nationality | French |
| Citizenship | France |
| Education | HEC Paris (1986) |
| Alma mater | HEC Paris |
| Occupation | Business executive |
| Years active | 1986–present |
| Employer | IFRS Foundation |
| Company | International Sustainability Standards Board |
| Organization | Danone; Consumer Goods Forum; One Planet Business for Biodiversity |
| Title | Chair of the International Sustainability Standards Board; former chairman and chief executive officer of Danone |
| Term | October 2014 – 14 March 2021 |
| Predecessor | Franck Riboud |
| Successor | Antoine de Saint-Affrique |
| Known for | Converting Danone into an entreprise à mission; leading corporate sustainability standard-setting |
| Salary | €2.8 million (2018) |
Emmanuel Faber (born 22 January 1964) is a French business executive who served as chief executive officer of Danone from 2014 and as its chairman and chief executive from 2017 until his removal by the board in March 2021. He has since chaired the International Sustainability Standards Board, the body established by the IFRS Foundation to set global standards for corporate sustainability disclosure.
Faber's tenure at Danone is the most prominent test to date of whether a large listed company can be run explicitly on stakeholder rather than shareholder principles, and its outcome is cited by both sides of that argument. In June 2020 he obtained the approval of 99 percent of Danone's shareholders to convert the company into an entreprise à mission under French law, a status that writes social and environmental objectives into the corporate purpose and requires independent verification of progress against them. Danone was the first listed French company to adopt it. "We have toppled the statue of Milton Friedman," Faber told the meeting.
Nine months later the board removed him. Two activist investors, Bluebell Capital Partners and Artisan Partners, holding small stakes, had campaigned against him on the ground that Danone's operating performance and share price had lagged those of Nestlé and Unilever for several years; the board split his roles and then dismissed him outright on 14 March 2021.
The episode was widely read as a decisive test case. Supporters argued that Faber was removed for a share price problem substantially caused by Danone's exposure to bottled water and to out-of-home consumption during the COVID-19 pandemic, and that the sustainability agenda was a pretext. Critics argued that a chief executive is accountable for returns whatever his stated purpose, and that the case demonstrated the limits of stakeholder rhetoric when performance lags. Time wrote that his work at Danone had made him a star among environmentalists and climate activists; Forbes wrote that he would enter history as one of the leading executives promoting stakeholder capitalism.
Background: Danone and the dual project
The company Faber led had an unusual doctrinal history, and his own position is not intelligible without it.
Danone's modern identity derives from Antoine Riboud, who led the glassmaker BSN and merged it with Gervais Danone in 1973. In a speech to the French employers' confederation at Marseille in October 1972, Riboud argued that corporate responsibility did not end at the factory gate and that economic growth and social progress had to be pursued together — a statement that became known as the double projet économique et social, the dual economic and social project, and that was treated within the company as its founding charter.
The doctrine was maintained by his son Franck Riboud, who led Danone from 1996 to 2014, and under whom the company divested its glass, beer and biscuit businesses to concentrate on dairy, water, early-life nutrition and medical nutrition, and established the Danone Communities and Danone Ecosystem funds for social ventures.
Danone was therefore, before Faber, the European listed company with the longest continuous commitment to stakeholder principles, and his appointment was understood at the time as a decision to continue it.
Early life and education
Faber was born on 22 January 1964. He took his baccalauréat at Gap in the early 1980s and graduated from HEC Paris in 1986.
His family circumstances have featured in accounts of his outlook: his father, an artist, suffered from alcoholism and later withdrew to a monastic life, and his younger brother had schizophrenia and died. Faber has written and spoken about both, and about his Catholic faith, in terms unusual for a French chief executive, and has connected them to his views on the responsibilities of business.
Early career
Faber began at Bain & Company in 1986 and moved to Barings Bank, working in mergers and acquisitions. In 1993 he joined Legris Industries, a French family-controlled industrial group, as administrative and financial director, becoming general manager in 1996.
Danone
Rise through the company
Faber joined Danone in 1997 as head of finance, strategy and information systems. He became chief financial officer and a member of the executive committee in 2000, and joined the board of directors in 2002.
In 2005 he was appointed vice-president for the Asia-Pacific region with operational responsibility, a posting that took him out of headquarters and into the company's fastest-growing markets. He returned to Paris as deputy chief executive in January 2008, responsible for finance, human resources and other corporate functions, and was named vice-chairman of the board in April 2011.
Work outside the company
Through this period Faber built an unusual portfolio of activity outside Danone, concerned with development and poverty.
At the invitation of Chico Whitaker he attended the World Social Forum at Belém in 2009 — an event founded explicitly as a counterpoint to Davos, and an unusual destination for the deputy chief executive of a CAC 40 company. From 2010 he co-chaired, with Martin Hirsch, the Action Tank "Business and Poverty", a social experimentation laboratory established under the HEC Paris chair in social business, which brought together companies, civil society organizations and academics to work on poverty and exclusion in France.
Between 2011 and 2018 he chaired the strategic guidance committee of the Institute for Economic and Social Development at Paris I Panthéon-Sorbonne. In 2013, at the request of the French development minister Pascal Canfin, he wrote a report with Jay Naidoo on reforming official development assistance, titled "Mobilizing actors: a new approach to development aid".
He was one of three French sponsors of World Youth Day 2011, with the actor Michael Lonsdale and the writer Éric-Emmanuel Schmitt.
Chief executive
Faber became chief executive of Danone in October 2014, succeeding Franck Riboud, who remained chairman. Le Figaro reported that Riboud had favoured the appointment as likely to preserve the dual model of economic and social objectives established by his father.
He took the chairmanship in addition in 2017, and his mandate was renewed in April 2019.
WhiteWave
Danone acquired the American company WhiteWave Foods in 2017 for about US$12.5 billion including debt, its largest transaction. WhiteWave owned Silk, Alpro, So Delicious and Horizon Organic, and the purchase made Danone the world leader in plant-based food and drink and a substantial player in organic dairy in the United States.
The acquisition was strategically coherent — plant-based products were the fastest-growing category in the sector and aligned with Danone's stated environmental commitments — but it was expensive, substantially increased leverage, and its integration proved harder than anticipated. The debt and the underperformance of parts of the acquired business featured in the later criticism of Faber's tenure.
The entreprise à mission
French law introduced the société à mission status through the PACTE law of 2019, allowing a company to write a purpose and specific social and environmental objectives into its articles of association and requiring an independent third party to verify progress against them.
Faber put the conversion to Danone's shareholders at the annual general meeting in June 2020, and it was approved by 99 percent. Danone became the first listed French company to adopt the status.
Faber's remark to the meeting — that the company had toppled the statue of Milton Friedman — was widely reported and became the episode's defining quotation. He also championed a carbon-adjusted earnings per share measure, under which the cost of the company's carbon emissions was deducted from reported earnings, and Danone published the figure alongside its conventional results.
International initiatives
Faber took leading roles in several industry and international bodies from 2019. He was appointed co-chairman of the Consumer Goods Forum in June 2019. In August 2019, at the margins of the G7 summit at Biarritz, President Emmanuel Macron asked him to assemble a coalition of large global companies committed to addressing inequalities of opportunity, territory and gender, an initiative sponsored by the OECD and known as Business for Inclusive Growth. In September 2019, at the United Nations Climate Action Summit, he announced One Planet Business for Biodiversity, a coalition of companies concerned with biodiversity in agriculture.
Compensation
Faber's compensation was €3.9 million in 2012 and €4.82 million in 2016. The 2018 figure of €2.8 million was approved by 98 percent of shareholders at the April 2019 general meeting, at which he also announced that he would relinquish his executive pension entitlement, worth about €1.2 million a year, and take only the standard employee pension.
In May 2020, during the COVID-19 crisis, the board accepted his proposal to reduce his fixed compensation by 30 percent for the remainder of the year.
Removal
Danone's shares had underperformed those of Nestlé and Unilever over several years, and the pandemic compounded the problem: the company's bottled water business, heavily dependent on consumption outside the home, was severely affected, and its early-life nutrition business in China faced falling birth rates and increased local competition. A cost-reduction programme announced in late 2020 involved up to 2,000 job losses.
Two activist investors with small holdings — Bluebell Capital Partners and Artisan Partners — campaigned publicly for Faber's removal, arguing that operational performance had been neglected and objecting to the combination of chairman and chief executive roles in one person.
The board split the roles on 1 March 2021, with Faber to remain as non-executive chairman while a new chief executive was recruited. Two weeks later, on 14 March 2021, it removed him from the chairmanship as well. Antoine de Saint-Affrique, formerly of Barry Callebaut, was appointed chief executive later that year.
International Sustainability Standards Board
In December 2021 the IFRS Foundation appointed Faber chair of the newly created International Sustainability Standards Board, announced at the COP26 conference in Glasgow, with a remit to develop a global baseline of sustainability disclosure standards for capital markets — the counterpart, for sustainability information, of the International Accounting Standards Board's role in financial reporting.
The ISSB issued its first two standards in June 2023: IFRS S1, covering general requirements for disclosure of sustainability-related financial information, and IFRS S2, covering climate-related disclosures. It absorbed the work of several predecessor bodies, including the Value Reporting Foundation and the Climate Disclosure Standards Board, consolidating a field that had been criticized for a proliferation of competing frameworks.
A substantial number of jurisdictions have since adopted or announced plans to adopt the standards, and the role has placed Faber at the centre of the technical question underlying the debate his Danone tenure dramatized: what companies must disclose, and on what basis, about matters other than financial performance.
Assessment
Faber's Danone tenure is treated as a test case, and the reading of it depends on what is thought to have been tested.
One account holds that he demonstrated the limits of stakeholder capitalism in a listed company: that whatever purpose is written into the articles of association, the board answers to shareholders, and a chief executive whose returns lag his peers will be removed regardless of what else he has achieved. That two small activist holdings were sufficient to force the outcome is generally treated as strengthening this reading rather than weakening it.
A second account holds that the test was contaminated. Danone's underperformance had identifiable causes — the WhiteWave debt, the exposure of bottled water to a pandemic that eliminated out-of-home consumption, and the deterioration of the Chinese infant formula market — none of which followed from the mission status adopted nine months before his removal. On this reading Faber was removed for ordinary operational reasons, and the association with stakeholder capitalism is a coincidence of timing that both his supporters and his critics have found convenient.
A third account, advanced by some governance specialists, focuses on the combination of roles: that Faber's position became untenable because he held both the chairmanship and the chief executive role, leaving no independent chair to mediate between him and dissatisfied shareholders, and that the lesson concerns board structure rather than corporate purpose.
His subsequent appointment to the ISSB has been read as a form of vindication, placing him in charge of building the disclosure infrastructure that would make stakeholder commitments measurable — and therefore, on his own argument, enforceable in a way that mission statements are not.
See also
References