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Unilever CEO Should Focus on Profits, Not Global Policy

Image: Unilever CEO Should Focus on Profits, Not Global Policy

Paul Polman, chief executive officer of Unilever, speaks in a panel discussion at the Clinton Global Initiative, back on Sept. 21, 2011 in New York. (Mark Lennihan/AP)

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Thursday, 30 Mar 2017 12:41 PM Current | Bio | Archive

The bottom line is that Paul Polman is not focused on the bottom line.

Polman is the chief executive officer of Unilever, the Anglo-Dutch consumer-products multinational.

Managing a corporation that operates in 100 countries, markets 400 different brands, employs 169,000 people, and grossed $56 billion in 2016 should be enough to keep Polman at his desk.

But this Dutchman has had his mind on far bigger things since he took over in 2009. "I am really more interested in development," Polman declared in February of this year. 

Polman co-authored a 2014 essay in which he announced that capitalism has "proved dysfunctional in important ways. It often encourages shortsightedness, contributes to wide disparities between the rich and the poor, and tolerates the reckless treatment of environmental capital."

Polman has directed his employees to avoid a singular focus on ROI (return on investment) and instead implement USLP — Unilever’s Sustainable Living Plan.

CEOs need not aspire to be Gordon Gekko. But they need not strive to be Mahatma Gandhi, either.

Polman seems to regard himself as the latter. "As CEO of Unilever, my personal mission is to galvanize the company to be an effective force for good."

The liberal media love Polman’s shift from generating black ink to pursuing a crunchy, green Weltanschauung (worldview).

Fortune praised "Paul Polman’s Plan to Save the World."

A Huffington Post headline crowed, "Unilever’s CEO Is All In on Addressing Climate Change, Global Poverty." The Guardian cheered in London, "Unilever’s Paul Polman on diversity, purpose and profits.”  Politico applauded, "It’s Not Just George Soros Anymore."

This outpouring of love in global newsrooms apparently has blinded the media to the dark side of Polman’s vision.

Under his leadership, Unilever has violated virtually every gospel that Polman has preached:

  • Unilever paid its female workers in Kenya about 3 euros per day in 2011 — or roughly $4.15 per day, at that year’s average exchange rate — according to The Irish Times. These women also inhabited low-quality housing. Even worse, the paper reported, these employees typically spent about a quarter of their wages to bribe their bosses to avoid being sexually harassed.

  • Unilever, sourced tea from Indian producers whose employees serve under consecutive, short-term contracts, Sri Lanka’s Daily Mirror reported in 2014. This keeps them on payroll, but without those pesky pension-and-health benefits.

  • Last year, Unilever settled a long-term legal battle with Indian workers who suffered mercury poisoning at a now-closed thermometer factory. The Indian government confirmed laborers’ complaints that mercury sickened them and harmed their children.

  • On March 2, South Africa’s Competition Commission recommended prosecuting Unilever for colluding with the Sime Darby Group over the sale of margarine and cooking oil. Unilever could be fined 10 percent of its annual revenue.

These corporate misdeeds have disgusted one Dutch watchdog.

The Center for Research on Multinational Corporations recently told Holland’s newspaper De Dagelijkse Standaard, "Do not fall for the sweet talk of Unilever." Adding, "This business is not the jewel in the Netherlands, but rather something we should be ashamed of."

While Polman has left human rights activists cold, he has frosted investors, too.

As Polman served as king of the world, Unilever’s sales growth hit a five-year low in 2014.

Its overall revenue fell 1 percent in 2016. In the last 12 months, Unilever’s stock price has risen 10.6 percent, lagging the S&P 500’s 14.4 percent increase and the Dow Jones’ 16.6 percent climb.

Investors were buoyed in mid-February of this year when Kraft Heinz offered to buy Unilever for $143 billion. Its stock soared 14 percent. But Polman then rained on the parade and rejected the deal. Analysts reckoned that Polman preferred to continue his global crusade rather than endure cost cutting under Kraft Heinz.

Graham Shore wrote last month in the Financial Times, "As a Unilever shareholder, I would prefer if Mr. Polman furthered his societal ambitions using his own rather than his shareholders’ money."

Paul Polman could satisfy many people, not least himself, by standing down as Unilever CEO and announcing his candidacy for secretary general of the United Nations.

Deroy Murdock is a Manhattan-based Fox News contributor and a contributing editor with National Review Online. He is also a media fellow with the Hoover Institution on War, Revolution, and Peace at Stanford University. Read more reports from Deroy Murdock — Click Here Now.

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CEOs need not aspire to be Gordon Gekko. But they need not strive to be Mahatma Gandhi, either. The bottom line is that Unilever's Paul Polman is not focused on the bottom line.
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Thursday, 30 Mar 2017 12:41 PM
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