Nestlé CEO fired over office relationship…
Nestlé is the world’s largest food and beverage company, with a portfolio that includes some of the most recognisable global brands such as KitKat, Nespresso, Maggi, and Nescafé. Headquartered in Switzerland, it operates in over 180 countries and employs more than 270,000 people worldwide. Its scale and reach mean that leadership decisions at the very top have a ripple effect not only on its workforce but also on consumers, investors, and the broader business community.
The recent dismissal of Laurent Freixe, Chief Executive Officer of Nestlé, is a reminder of how corporate governance, ethics, and leadership credibility are intertwined. Business students studying strategy, management, and ethics can draw important lessons from this high-profile case, which combines questions of personal conduct with corporate stability and strategic continuity.
The Facts Behind the Departure
Laurent Freixe, a Nestlé veteran with nearly 40 years of service, was dismissed after an internal investigation revealed that he had engaged in a romantic relationship with a direct subordinate. The company’s Code of Business Conduct clearly prohibits such relationships due to the risk of conflicts of interest, power imbalances, and reputational damage.
Concerns about the relationship were first raised through Nestlé’s internal whistleblowing hotline earlier this year. An initial investigation was inconclusive, but a second review — overseen by Nestlé’s chairman, Paul Bulcke, and lead independent director, Pablo Isla, with support from an external firm — confirmed the breach. Importantly, Freixe had initially denied the allegations, which ultimately undermined his credibility with the board.
Nestlé made the decision to dismiss him without an exit package, signalling the seriousness of the breach. Philipp Navratil, an internal successor with a long track record in coffee and Nespresso, was immediately appointed as CEO.
Why This Matters: Corporate Governance in Action
From a corporate governance perspective, this case illustrates several important dynamics:
Code of Conduct Enforcement – Large multinational corporations like Nestlé rely on clear codes of conduct to safeguard fairness, trust, and compliance. By acting on the hotline report and confirming the breach, Nestlé demonstrated that no executive is “above the rules.”
Whistleblowing Channels – The case shows the importance of safe and trusted reporting systems. Without the hotline, the relationship might not have been exposed, potentially leading to ethical risks or compromised decision-making.
Board Oversight – The board’s swift intervention highlights its role in holding senior leaders accountable. Shareholders, regulators, and employees expect boards to protect the company’s reputation and ensure consistent values across all levels.
Reputational Risk Management – For consumer-facing brands like KitKat, Nespresso, and Maggi, reputation is a core asset. Nestlé’s decisive response aimed to limit long-term reputational damage, even if short-term investor confidence wavered.
Ethical Dimensions for Future Leaders
The scandal raises key ethical considerations for current and aspiring leaders:
Power and Responsibility: Romantic relationships between senior executives and subordinates pose inherent risks of favouritism, coercion, or perceived bias. Even when consensual, the imbalance of power creates ethical dilemmas.
Transparency and Trust: The fact that Freixe initially denied the relationship intensified the issue. Honesty with stakeholders — especially the board — is a non-negotiable expectation of corporate leaders.
Personal vs Professional Boundaries: Leaders must understand how personal choices can influence professional credibility. In a global corporation, reputational consequences are amplified.
For business students, this case reinforces that leadership is not only about strategic vision or financial results but also about modelling integrity.
Lessons for Business Students
This episode offers multiple takeaways for those preparing to enter the corporate world:
Ethics are Non-Negotiable – Even decades of service cannot shield a leader from accountability if they breach ethical standards.
Reputation Can Shift Overnight – One decision can undo years of credibility. Reputation management is as important as financial management.
Succession Planning is Critical – Companies must identify and prepare internal leaders to ensure stability during unexpected leadership transitions.
Transparency Builds Trust – Leaders must be transparent with boards, employees, and stakeholders. Denials or cover-ups can be more damaging than the original issue.
Corporate Governance Protects – Strong systems, from hotlines to independent oversight, are essential for safeguarding fairness and trust across global organisations.
Conclusion
The dismissal of Laurent Freixe is more than just a corporate scandal; it is a reminder of the responsibilities that come with leadership. For students of business, it highlights that while financial performance is critical, leadership integrity, governance systems, and ethical decision-making are equally vital to sustaining a global brand. Nestlé’s rapid response reflects a company determined to uphold its values, and the appointment of Philipp Navratil signals both continuity and renewal.
