Another Danone Investor Joins Calls for Change, Accountability

Another investor in Danone SA is calling on the board to split the roles of chairman and chief executive officer, and to hold management accountable for its missed targets.

Los Angeles-based Causeway Capital Management has lent its voice to a growing chorus of shareholders calling for changes at Danone to help improve its performance. Ellen Lee, a portfolio manager at Causeway, said the investment firm has shared its views with the world’s largest yogurt maker and what it thinks needs to be done.

“It is pretty obvious to any outsider that a single chairman-CEO, in most cases, is not enhancing corporate governance,” Lee said in an interview. “Taking into account their track record for the past few years, this is something that we believe could be an improvement to governance and enhance shareholder value.”

She said that management needs to be held accountable given the company’s poor track record.

“We want to make sure if there is non-delivery of promises, people have to take accountability. I think that’s pretty self-explanatory what that could mean,” Lee said, declining to go into further detail. “I would lean on the board to make sure they’re looking out for minority shareholders, and we want that to be very transparent.”

Causeway owned a 92-million euros ($112 million) stake in Danone at the end of December, according to data complied by Bloomberg. Lee declined to say whether the size of the stake has changed since then.

The investor’s concerns come after Danone’s third-largest holder, Artisan Partners Asset Management Inc., wrote a letter Thursday to incoming board member, Gilles Schnepp, arguing the company has the “wrong focus.” The investment firm, which also called for a split of the CEO and chairman roles, said it had created a long-term growth plan that it wanted the board to review.

A representative for Danone wasn’t immediately available to comment. The company said in a statement Thursday it valued discussions with its investors, and noted that it had made changes to the board and management late last year with an eye for greater independence, diversity and expertise. It also struck a special committee to monitor progress on its own transformation plan, it added.

Activist investor Bluebell Capital Partners, which also holds a stake in Danone, has called on the company to remove Chief Executive Officer Emmanuel Faber, among other measures. Giuseppe Bivona, Bluebell Capital Partners chief investment officer, urged Danone to review the plan put forth by Artisan.

”It is urgent that the board of directors of Danone take decisive actions,” Bivona said in an email Thursday.

Causeway Capital, which was founded in 2001, is a global equity manager with roughly $45.5 billion in assets under management.

Shares in Danone closed up 2.2% to 54.54 euros Thursday in Paris, giving the company a market value of 37.5 billion euros.

©2021 Bloomberg L.P.

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