Corporate Governance

Our Board of Directors is highly engaged and dedicated to creating long‑term, sustainable value based on strong principles of governance and an appropriate tone from the top. Our corporate governance framework is carefully constructed, and continually evaluated and updated, to ensure that it promotes accountability and supports our strategy to foster long‑term value and sustainable growth for the benefit of all shareholders.

In 2018, our Board of Directors and management continued to evolve our strategy and governance to anticipate and reflect changing global consumer preferences and offer high‑quality, competitive, relevant and innovative products. As part of this effort, we have been driving growth through innovation with significant investments in R&D. In addition to our organic growth strategy, our Board and management have taken an active role in streamlining Nestlé’s portfolio to focus on high‑growth, high-margin businesses, and we will continue to rigorously review our business mix for further opportunities to drive profitable growth and shareholder value. To ensure that our incentive plans promote the execution of our strategy, we have updated our executive compensation plan to introduce Return on Invested Capital (ROIC) as a performance measure. Tying compensation to returns promotes the efficient use of capital and M&A discipline.

The Board also reconfirmed Nestlé’s value creation model delivering both top- and bottom-line growth, as well as capital efficiency to drive continuous long‑term shareholder value creation. We continue to deliver on our commitments to execute the proven Nutrition, Health and Wellness (NHW) strategy and promoting a prudent approach toward capital allocation and M&A. We also remain focused on executing on our CHF 20 billion repurchase program and sustainable dividend policy. To date, our strategy has yielded strong, consistent results for our shareholders, as reflected in our shortand long‑term outperformance of the STOXX 1800 Food & Beverage index. CHF 104 billion cash was returned to shareholders since 2009 including CHF 40 billion in share buybacks and CHF 64 billion in dividends.

Our Board’s recent actions to create sustained value also include continued efforts to enhance the composition of the Board. As a truly global business, we have always felt that constructing a diverse board—including but not limited to diversity in background, geography, experience, ethnicity and gender—is critical to our ability to effectively oversee the direction of our company. In 2018, we nominated three new independent directors, each of whom was elected by our shareholders at our 2018 Annual Meeting. Since 2015, we have strengthened the Board through the addition of seven new independent directors with unique depth of experience and expertise that is directly relevant for Nestlé and aligned with our strategy. To this end, we will continue to maintain a long‑term approach to board refreshment and succession planning to ensure that our Board has the right mix of backgrounds, skills and expertise to understand the trajectory of our business and drive a winning strategy that creates value for all of our shareholders.

Intense engagement with our shareholders through our roadshows, investor meetings and analyst calls has sharpened our focus on our core priorities and strategic vision. In 2018, we visited 23 cities and attended 488 meetings representing 1148 investors. Moreover, our shareholder engagement effort continues to be highlighted by our Chairman’s Roundtables that we held this past year in Hong Kong, Frankfurt, Paris, Zurich, London, New York and Tokyo. The Board and management will continue to seek and incorporate feedback to ensure we are acting in the best interests of our shareholders.

Our Chairman’s and Corporate Governance Committee acts as a consultant body to the Chairman and CEO, and regularly reviews aspects of our governance, as well as asset and liability management. Our Nomination and Sustainability Committee, chaired by our Lead Independent Director, evaluates Board composition, structure and succession planning. The Committee regularly assesses potential candidates for nomination to the Board in the coming years. It also reviews all aspects of our environmental and social sustainability policies.

Our Compensation Committee sets our remuneration principles and submits the proposals for remuneration of the Board and the Executive Board to the Board and the AGM. It ensures the alignment of our values, strategies and performance management. Our compensation budgets and our compensation report are submitted to annual votes by our shareholders.

Our Audit Committee oversees internal and external audit, financial reporting, compliance and risk management. Our internal audit function was strengthened and our mandate for external audit was put up for tender.

We further integrated our public reporting on our financial and non‑financial performance by including the highlights from our Nestlé in society report in our Annual Review. We recognize that for our company to be successful over time and create sustainable value for shareholders, we must also create value for society. We do this through our more than 2000 brands that enhance quality of life and contribute to a healthier future.

Download our Corporate Governance Report 2019 in English (pdf, 2Mb), Français (pdf, 2Mb) and Deutsch (pdf, 2Mb).

Share capital