Swiss food giant Nestlé has dismissed Chief Executive Officer Laurent Freixe after an investigation confirmed he had engaged in an undisclosed romantic relationship with a direct subordinate, in violation of the company’s code of conduct.
The company announced that veteran executive Philipp Navratil, head of the Nespresso coffee unit, has been appointed as Freixe’s successor with immediate effect.
The abrupt dismissal marked another leadership shake-up for Nestlé amid a challenging consumer environment and escalating US trade tariffs. It also comes exactly one year after the board ousted Freixe’s predecessor, Mark Schneider, raising concerns over instability at the top.
Nestlé said the decision followed a probe overseen by Chairman Paul Bulcke and Lead Independent Director Pablo Isla.
“This was a necessary decision,” Bulcke said in a statement. “Nestlé’s values and governance are strong foundations of our company. I thank Laurent for his years of service.”
A spokesperson told Reuters that initial concerns about Freixe’s conduct surfaced in the spring through the company’s internal hotline.
An investigation was launched but proved inconclusive.
However, a second probe, supported by an external firm, confirmed the relationship.
The spokesperson added that Freixe initially denied the allegations when questioned by the board.
The leadership crisis adds to scrutiny of corporate governance across top U.S. and European firms.
In May, US retailer Kohl’s dismissed CEO Ashley Buchanan after it emerged he had pursued deals with a vendor with whom he had a personal relationship, while Astronomer CEO Andy Byron resigned in July after being filmed embracing a staffer at a Coldplay concert.
Analysts warned that Nestlé’s latest upheaval could unsettle investor confidence.
“This new change is likely to keep afloat the question mark about the mid-term direction of the company,” JPMorgan analysts wrote in a client note.
Nestlé, however, insisted it remains committed to its strategic goals and targets despite the leadership change.
Navratil, who began his career at Nestlé in 2001 as an internal auditor, has steadily risen through the ranks.
He served as country manager for Nestlé Honduras in 2009, later led the coffee and beverage division in Mexico, and most recently headed Nestlé’s Coffee strategic business unit before taking charge of Nespresso.
Bulcke himself is due to step down as chairman next year, further adding to questions about the future direction of the world’s largest packaged food company.
