Danone to pioneer French “Entreprise à Mission” model to progress
stakeholder value creation
Press release – Paris, May 20,
2020
Update on 2020 Annual General
MeetingDanone to pioneer French “Entreprise à Mission”
model to progress stakeholder value
creation
2020 Annual General Meeting (AGM) to be held on June 26th,
2020
- Danone to become first listed company to adopt French legal
framework of "entreprise à mission" and so further lead the way to
create and share sustainable value for all stakeholders
- Confirmed dividend payment for 2019, in line with original
recommendation
- Chairman and CEO’s fixed remuneration and Directors’
compensation to be reduced for rest of 2020, to fund the Dan’Cares
program
|
The Board of Directors of Danone met yesterday
to agree arrangements and proposed resolutions for the 2020 AGM,
which will be held on 26th June 2020 in closed session, given the
context of COVID-19 pandemic. This context brings with it increased
expectations on companies to demonstrate their use to society, and
for trusted brands to go beyond their normal ways of engaging with
consumers. The Board reaffirmed under these circumstances the
strong commitment of Danone to the sustainable shared value
creation model that has driven its vision of business since it
established its dual economic and social project for the first time
in 1972. At the heart of this business model lies the
conviction that commitment to all stakeholders creates further
value for all of them, including shareholders.
The Board will therefore recommend at the AGM
that:
- Danone becomes the first listed
company to adopt the ‘Entreprise à Mission’ model created by French
law in 2019. This will embed the legal “entreprise à
mission” framework within its articles of association (including a
purpose) and apply a new governance arrangement to oversee the
progress of its environmental, social and societal goals. By doing
so, Danone adds to the trajectory that inspired its largest
subsidiary, Danone North America, to become the world’s largest
Public Benefit Corporation. It also propels Danone further down the
path of achieving its ambition to become B Corp certified at global
level.
- The proposed 2019 dividend is paid in
line with the original recommendation (€2.10 per share in
cash), in light of Danone’s business resilience, access to
liquidity and balance sheet strength that also enabled the support
given to the entire ecosystem of the company (employees, suppliers,
farmers, and other business partners) since the start of COVID-19
pandemic. This amount is consistent with the Board’s policy to
remunerate shareholders with a reasonable and consistent dividend
payout ratio. Assuming this proposal is approved at the General
Meeting, the ex-dividend date will be July 14, 2020 and dividends
will be payable on July 16, 2020. The company confirms that no
share buyback operations will take place in 2020.
The Board of Directors also accepted Mr
Emmanuel Faber’s proposal, in a spirit of solidarity, to reduce by
30% his fixed remuneration for the rest of year 2020 with effect
from July 1st 2020 and the Members of the Board of
Directors decided to give up their entire compensation for the
second half of 2020, in order to allocate the corresponding amounts
to the financing of Dan’Cares1 program in favor of the expansion of
Danone employees’ health coverage.
Emmanuel Faber, Chairman and CEO,
said:
“We are on the threshold of a time when what we
mean by “in the ordinary course of business” will change forever.
This is an extraordinary moment. Putting the DNA of Danone at the
heart of our articles of association by becoming an Entreprise à
Mission may be a natural step for us. But it could not be timelier
and more meaningful, as employees, consumers, customers, partners,
governments and shareholders now see the critical importance of a
balanced multi-stakeholder approach to value creation and
sharing.
We made an unequivocal choice to protect our
whole business ecosystem during the current entry phase into what
will be a radically new operating environment, while we are
witnessing sanitary scenarii unfolding, gradually assessing how
they will impact the way people live and work, and before we then
start our own preparation for long-term adaptation.
Our people have been our number one priority. We
moved quickly to ensure their safety and took unprecedented
measures to protect their incomes. We’ve also used our scale and
our brands beyond the norm in how we have supported our ecosystem
in radically new ways.
Obviously, we would not have been able to do
this without the support of our shareholders; the people whose
savings were invested in Danone with the confidence that our
ambition is to lead the way to create and share value for all. So,
similarly, their interests need also to be recognized. This is why
our Board made the decision to maintain the initial recommendation
for the 2019 dividend.
I am convinced that becoming an Entreprise à
Mission will meet our objective to serve, in a fair and transparent
manner, everyone in our business ecosystem, and therefore create
for Danone a consistent and efficient framework for how we will
create resilient, and therefore sustainable, value in this new
world.
It will obviously support our objective to be
the first very large company to achieve, in five years, global B
Corp status. Namely that all our businesses and brands are seen in
the eyes of consumers, and of all Danone stakeholders, as serving
society’s and people’s interests.
This too is an energizing opportunity to engage
further with our shareholders about the fit between our integrated
goals for 2030 and their more than ever increasing ESG
agendas.”
Update on Danone’s key actions to
protect its ecosystem in COVID-19 context
Since the start of COVID-19 pandemic, Danone’s
priority has been to maintain the availability of its daily food
supply to consumers and protect the interests of its entire
ecosystem through key actions on the ground. For its
employees, employment contracts have been secured
and wages guaranteed for all Danone employees worldwide until June
30; extensive health and childcare coverage has been provided for
all employees worldwide; and specific bonus have been paid to all
employees working on site during the pandemic lockdowns. For its
trading partners, a financial support of c. €300
million has been made available. This includes €250 million of
available cash flow for extended payment terms and credit to
farmers, suppliers and smaller customers in its global ecosystem; a
$10 million relief fund, dedicated to supporting the entrepreneurs
of Danone Manifesto Ventures’ portfolio; and a €20 million
extra-fund in Danone Ecosystem Fund, supporting since 2009 the
partners of Danone’s ecosystems notably around employment, skills
and employability and micro-entrepreneurship, with total donated
funds now reaching more than €125 million. For the most
vulnerable people, a total of €6m of funds and 32 million
of products have been donated since the beginning of the crisis.
These actions, were entirely funded with the company’s cash flow
and in order to ensure the authorities could first
help the companies that needed it the most, the company ensured
there was no delay in the payment of any social charges or taxes
during this period.
Danone to
become the first listed ‘Entreprise à Mission’ in
France
Framework for “Entreprise à Mission”
model in France
Introduced in France in 2019 with the “Pacte”
law, an “entreprise à mission” company is defined as a company
whose purpose, and whose objectives in the social, societal and
environmental fields aligned with this purpose, are set out in its
Articles of Association. It is not a new legal form. The aim is to
ensure that the purpose of the company is fixed on long-term
objectives which are described in the company’s Articles (the
Mission). The Articles specify the means by which the execution of
the Mission will be monitored, under the control of a Mission
Committee, which is distinct from the Board Committees and which
must include at least one employee. An independent third party
verifies the execution of the Mission, and establishes a written
opinion which is annexed to the report of the Mission Committee to
shareholders and made available on the internet site of the company
for a period of 5 years.
A pioneer and natural step in Danone’s
50-year journey of dual economic and social project
The adoption of the “entreprise à mission”
status is a logical and natural step for Danone, which has had a
mission for several years and for which the pursuit of a long-term
vision enabling sustained, sustainable and resource-conscious value
creation with and for all its stakeholders is anchored in the
company's values.
The relevance of this new status reaches far
beyond the confines of France because it legally enshrines, at the
heart of the company, Danone’s purpose which is applied
globally.
Its purpose is consistent with Danone’s mission
defined in 2005 to “bring health through food to as many people as
possible”. Its social, societal and environmental objectives are
consistent with the “OnePlanet. One Health” frame of action and the
nine integrated strategic goals set out in 2018, aligned with the
2030 United Nations Sustainable Development Goals, embedding the
business, brand and trust models of the company to drive long-term
sustainable value creation.
This move to adopt a legally enforceable purpose
for Danone also comes with a strengthened governance framework. The
progress towards the social, societal and environmental goals set
for the Mission will be verified by an independent third party and
overseen by a newly created Mission Committee, which will regroup
about ten eminent and qualified global experts, including from
non-governmental and international organizations, appointed by the
Board of Directors. The Mission Committee will review and challenge
the company’s roadmap and progress particularly on subjects such as
health & nutrition, water, agriculture, biodiversity,
packaging, social innovation, people and social matters.
This step is independent from but consistent
with Danone’s ambition to become certified B Corporation®, where a
certification is provided by B Lab that goes beyond product
certification as it measures a company’s entire social and
environmental performance and evaluates how operations, business
model and governance impact workers, community, environment, and
customers. To date, 20 subsidiaries of Danone have become B Corp
Certified and more than one third of Danone’s global business is
already covered by B CorpTM certification, and an additional 15
subsidiaries are in the process of certification for 2020.
Purpose in articles of
association
PurposeThe purpose (raison
d’être) of the Company is to bring health through food to as many
people as possible. This purpose is embedded in the “One Planet.
One Health” framework of action of Danone, which reflects its
strong belief that people’s health and the planet’s preservation
are interconnected and should be at the core of a food company’s
strategy. This framework of action builds on decades of responsible
business stewardship to serve a dual economic and social
project.
Environmental, social and societal
objectivesIn connection with its purpose, the Company
defined strategic goals aligned with the 2030 United Nations
Sustainable Development Goals, embedding the business, brand and
trust models of the Company to drive long-term sustainable value
creation. Among these strategic goals, the social and environmental
objectives that the Company sets as its mission to pursue as part
of its activities, pursuant to 2° of Article L.210-10 of French
Commercial Code, integrated into its model of profitable and
sustainable growth, are as follows (the “Mission”): - Impact
people’s health locally, with a portfolio of healthier products,
with brands encouraging better nutritional choices and by promoting
better dietary habits; - Preserve and renew the planet’s resources,
by supporting regenerative agriculture, protecting the water cycle
and strengthening the circular economy of packaging, across its
entire ecosystem in order to contribute to the fight against
climate change;- Entrust Danone’s people to create new futures:
building on a unique social innovation heritage, give each employee
the opportunity to impact the decisions of the Company, both
locally and globally; - Foster inclusive growth, by ensuring equal
opportunities within the Company, supporting the most vulnerable
partners in its ecosystem and developing everyday products
accessible to as many people as possible.
Arrangements for 2020 Annual
General Meeting
Danone’s 2020 Annual General Meeting will be
convened on Friday, June 26th 2020 at
2:30pm CET. Out of concern for people’s health
given COVID-19 pandemic and in application of the provisions of
Ordinance 2020-321 of March 25, 2020, it will be held at Danone’s
registered office - 17 boulevard Haussmann 75009 Paris - in closed
session, without the physical presence of shareholders and other
persons entitled to attend. The Board regrets the unusual
circumstances of the Meeting in these extraordinary times. The
Meeting will be webcasted live on Danone’s website. Shareholders
are highly encouraged to vote, or to give a proxy, in advance of
the Meeting. The practicalities of how shareholders should exercise
their rights (including voting and asking written questions) will
be detailed in the Notice of Meeting, which will be published
soon.
o o O o o
FORWARD-LOOKING STATEMENTS
This press release contains certain
forward-looking statements concerning Danone. In some cases, you
can identify these forward-looking statements by forward-looking
words, such as “estimate”, “expect”, “anticipate”, “project”,
“plan”, “intend”, “objective”, “believe”, “forecast”, “guidance”,
“foresee”, “likely”, “may”, “should”, “goal”, “target”, “might”,
“will”, “could”, “predict”, “continue”, “convinced” and
“confident,” the negative or plural of these words and other
comparable terminology. Forward looking statements in this document
include, but are not limited to, predictions of future activities,
operations, direction, performance and results of Danone.
Although Danone believes its expectations are
based on reasonable assumptions, these forward-looking statements
are subject to numerous risks and uncertainties, which could cause
actual results to differ materially from those anticipated in these
forward-looking statements. For a detailed description of these
risks and uncertainties, please refer to the “Risk Factor” section
of Danone’s Universal Registration Document (the current version of
which is available on www.danone.com).
Subject to regulatory requirements, Danone does
not undertake to publicly update or revise any of these
forward-looking statements. This document does not constitute an
offer to sell, or a solicitation of an offer to buy Danone
securities.
1 Danone launched the Dan’Cares program in 2010 with the
objective to offer health coverage and health education to every
employee. The top-3 risks covered are hospitalization and surgery,
outpatient care and maternity care.
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