On September 1, 2025, Nestlé S.A., the world’s largest food and beverage company, announced the immediate dismissal of its Chief Executive Officer, Laurent Freixe, following an internal investigation into an undisclosed romantic relationship with a direct subordinate. This breach of the company’s code of conduct has sent shockwaves through the corporate world, marking the second CEO departure in just over a year for the Swiss multinational. Freixe, who had been with Nestlé for nearly four decades, was replaced by Philipp Navratil, a veteran executive and former head of the Nespresso division. This article delves into the circumstances surrounding Freixe’s ouster, its implications for Nestlé’s future, and the broader context of corporate governance in the modern era.
Background: Laurent Freixe’s Tenure at Nestlé
Laurent Freixe, born in Paris in 1962, joined Nestlé in 1986, embarking on a career that spanned nearly 40 years with the company. A graduate of EDHEC Business School with a focus on marketing, Freixe rose through the ranks, holding key leadership roles across Europe and the Americas. His early career included stints in sales and marketing in France, followed by leadership positions in Hungary, Spain, and Portugal. By 2008, he was appointed Executive Vice President and Zone Director for Europe, navigating the company through the global financial crisis and the Eurozone debt crisis. In 2014, he took charge of the Americas, overseeing operations in the United States, Canada, Latin America, and the Caribbean. In 2022, he became CEO of Zone Latin America before being promoted to Nestlé’s global CEO on September 1, 2024, succeeding Mark Schneider.
Freixe’s appointment as CEO came at a challenging time for Nestlé. The company’s stock had plummeted nearly 40% from its 2022 high, driven by shifting consumer habits influenced by the rise of weight-loss drugs and economic pressures such as U.S. trade tariffs and a strong Swiss franc. Freixe was tasked with reversing sluggish consumer spending and restoring investor confidence. His strategy focused on cost-cutting, increasing advertising budgets, and reversing some of Schneider’s restructuring efforts. Notably, he aimed to reduce acquisitions and invest in innovation to drive revenue growth, a philosophy he described as a “virtuous circle.” Despite these efforts, Nestlé’s shares continued to lag, dropping 17% during his tenure, and the company faced challenges in its vitamins, minerals, and supplements business.
The Investigation and Dismissal
The catalyst for Freixe’s abrupt departure was an investigation into an undisclosed romantic relationship with a direct subordinate, which violated Nestlé’s code of business conduct. According to multiple sources, concerns about the relationship first surfaced in the spring of 2025 through the company’s internal whistleblowing channel, known as the “Speak Up” hotline. An initial investigation proved inconclusive, but persistent concerns prompted a second probe, overseen by Chairman Paul Bulcke and Lead Independent Director Pablo Isla, with support from external legal counsel, reportedly Swiss law firm Baer & Karrer.
The second investigation confirmed the relationship, which Freixe had initially denied to the board. Nestlé’s code of conduct prohibits direct reporting relationships between partners or close associates, requiring such relationships to be disclosed to avoid conflicts of interest. The company stated that Freixe’s failure to disclose the relationship constituted a breach of its ethical standards, leading to his immediate dismissal without an exit package. The female subordinate, whose identity has not been disclosed, reportedly left Nestlé over the summer of 2025.
Chairman Paul Bulcke emphasized the necessity of the decision, stating, “Nestlé’s values and governance are strong foundations of our company. I thank Laurent for his years of service.” The swift and decisive action underscores Nestlé’s commitment to upholding its corporate governance standards, particularly in an era of heightened scrutiny over executive conduct.
Philipp Navratil: The New CEO
In a swift move to stabilize leadership, Nestlé appointed Philipp Navratil as Freixe’s successor, effective immediately. Navratil, aged 49, is a longtime Nestlé executive who began his career with the company in 2001 as an internal auditor. He held various commercial roles in Central America, including Country Manager for Nestlé Honduras in 2009, and led the coffee and beverage business in Mexico from 2013 to 2020, bolstering the Nescafé brand. In 2020, he joined Nestlé’s Coffee Strategic Business Unit, overseeing global strategy for Nescafé and a licensing partnership with Starbucks. Most recently, he served as CEO of Nespresso, starting in July 2024, and joined the Nestlé executive board in January 2025.
Bulcke praised Navratil’s “impressive track record of achieving results in challenging environments” and his “dynamic presence” that inspires collaborative leadership. Navratil expressed his commitment to Nestlé’s strategic direction, stating, “I fully embrace the company’s action plan to drive performance and will execute it with intensity.” Analysts view Navratil as a “safe” choice, given his deep familiarity with Nestlé’s operations and culture. However, some, like Patrik Schwendimann of Zuercher Kantonalbank, note that Navratil may be “boxed in” by Freixe’s existing turnaround strategy, potentially limiting his ability to implement bold changes in the short term.
Corporate Governance and Workplace Relationships
Freixe’s dismissal places him among a growing list of high-profile executives ousted over workplace relationships that violate company policies. Recent examples include BP’s Bernard Looney, who resigned in 2023 for failing to disclose past relationships, McDonald’s Steve Easterbrook, ousted in 2019 for a consensual relationship with an employee, and Intel’s Brian Krzanich, who stepped down in 2018 for a similar violation. These cases highlight the increasing scrutiny on executive conduct, particularly in the United States, where corporate governance standards have become more stringent.
Nestlé’s code of conduct, like those of many multinational corporations, requires transparency in relationships that could pose conflicts of interest. Swiss law does not prohibit relationships between senior executives, but companies like Nestlé enforce internal policies to maintain ethical standards. Corporate governance expert Peter V. Kunz from the University of Bern described Freixe’s actions as “stupid and incomprehensible” in the modern corporate landscape, emphasizing that undisclosed relationships undermine trust and accountability.
The investigation into Freixe’s conduct was triggered by Nestlé’s internal reporting mechanisms, demonstrating the effectiveness of whistleblowing channels in upholding corporate standards. The involvement of external counsel further ensured impartiality, reflecting best practices in corporate governance. However, the incident has raised questions about Nestlé’s leadership stability, especially given the company’s recent challenges.
Nestlé’s Broader Challenges
Freixe’s dismissal comes at a tumultuous time for Nestlé. The company has faced declining sales in its core businesses, including Nescafé, KitKat, and Purina, exacerbated by a tough consumer environment and external pressures like U.S. tariffs. Nestlé’s shares have lost nearly a third of their value over the past five years, underperforming European peers like Unilever and Danone. The company reported modest organic sales growth of 3% in its second fiscal quarter of 2025, but its vitamins business has struggled, prompting a strategic review that could lead to divestitures.
The leadership upheaval adds to Nestlé’s challenges. Freixe’s predecessor, Mark Schneider, was ousted in August 2024 after concerns about his cultural fit and failure to reverse the company’s fortunes. Additionally, Chairman Paul Bulcke announced in June 2025 that he would step down in April 2026, with Pablo Isla, former CEO of Inditex, set to replace him. The loss of two CEOs and a chairman within a year is unprecedented in Nestlé’s 159-year history, prompting analysts like Ingo Speich of Deka to describe it as a “crisis of historic proportions.”
Market and Investor Reactions
Nestlé’s shares fell 3.6% in early trading on September 2, 2025, following the announcement of Freixe’s dismissal, though they later closed 0.7% lower at 75.49 Swiss francs. The market’s reaction reflects investor concerns about leadership instability and its potential impact on Nestlé’s recovery efforts. JP Morgan analysts noted that the change “keeps afloat the question mark about the mid-term direction of the company,” highlighting the uncertainty surrounding Nestlé’s strategy.
Some analysts, however, see potential in Navratil’s appointment. Schwendimann suggested that the leadership change could accelerate Nestlé’s recovery by bringing fresh energy to its efficiency efforts. Navratil’s experience in the coffee sector, particularly with high-performing brands like Nespresso and Nescafé, positions him well to address Nestlé’s challenges in its core markets. Nevertheless, the company faces a daunting task in restoring investor confidence amid a darkening global economic outlook.
Implications for Corporate Culture
Nestlé’s conservative corporate culture, rooted in its Swiss heritage, places a premium on ethical conduct and governance. The swift dismissal of Freixe reinforces this commitment but also highlights the challenges of maintaining stability during leadership transitions. The company’s decision to act decisively, without offering Freixe an exit package, sends a strong message about accountability, particularly for senior executives.
The incident also underscores the evolving expectations for corporate leaders. In an era where workplace dynamics are under intense scrutiny, executives must navigate personal and professional boundaries with greater care. The rise of whistleblowing mechanisms and external investigations reflects a broader trend toward transparency and accountability, particularly in multinational corporations.
Conclusion
The dismissal of Laurent Freixe as Nestlé’s CEO marks a significant moment in the company’s history, compounding its leadership challenges at a time of economic and strategic uncertainty. While Freixe’s nearly 40-year tenure at Nestlé was marked by significant achievements, his failure to disclose a romantic relationship with a subordinate led to his swift exit, underscoring the importance of corporate governance. Philipp Navratil’s appointment offers hope for continuity, but his ability to navigate Nestlé’s complex challenges remains to be seen. As the company grapples with declining sales, market pressures, and investor skepticism, the events of September 2025 serve as a reminder of the delicate balance between leadership, ethics, and performance in the corporate world.
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