Unilever (2017): The Board of Directors and the CEO in Governance and Strategy

The Kraft Heinz takeover offer to buy Unilever in February 2017 is an inflection point for a leading company in the global consumer goods industry that has been doing quite well for the past few years. Unilever is a multi-stakeholder company that has become the leader in sustainability strategy in the fast moving consumer goods landscape. This case allows for a discussion on what the board and the CEO should do in facing and preparing a formal answer to a hostile takeover attempt by Kraft Heinz. The case presents relevant factors that the board of Unilever can take into account in its debate. In particular, it highlights the specific responsibility that the board has to protect the company for the long term, and also offer shareholders the best possible option. The potential impact on the nature of ownership should not become a barrier for the board to decide in the best possible way who the best owners of the company should be. In particular, the takeover attempt presents a unique opportunity for the board of directors and the CEO to review Unilever's strategy, in particular, the Unilever Sustainable Living Plan. A key challenge that the board and the CEO need to face is whether, with the backdrop of the takeover attempt, they should reduce the goals and expectations of the ESG strategy of the firm, or, on the contrary, they should speed this effort up. The case also allows for a discussion on the role and interaction between the CEO and the board of directors to address the challenge that this takeover attempt creates. The challenge that Unilever faces is also a threat to the CEO and his management team. How the board should react to this situation is an extremely complex question, as it is for all companies facing such a challenge.