Nestlé Chair Paul Bulcke Faces Calls to Quit After Second CEO Ouster in a Year

Nestlé’s chairman Paul Bulcke is facing mounting calls to step down after the company’s board last week dismissed Chief Executive Laurent Freixe following an internal probe that found he had an undisclosed romantic relationship with a direct report.

The abrupt firing — the second chief executive ousted in just over a year — has intensified investor anger and renewed scrutiny of Nestlé’s governance. Freixe, 63, was sacked without severance pay, the company said. Nestlé announced Philipp Navratil, 49, head of its Nespresso division, as Freixe’s successor.

Nestlé said the dismissal resulted from a “clear breach” of the company’s code of conduct. The board launched an initial probe this spring after a whistleblower complaint filed through the company’s anonymous hotline, and that inquiry found no evidence. A second round of complaints prompted a fresh investigation led by outside counsel that substantiated the relationship, Nestlé said. Freixe denied the affair.

Investors and governance critics said the episode exposed deeper problems at the world’s largest food and beverage company, pointing to a leadership model that concentrates influence in the chair. Bulcke, 71, who spent 46 years at Nestlé, served as CEO from 2008 until 2017 and became chairman thereafter. He was appointed chair again after Mark Schneider was removed in August 2024.

“It’s a matter of decency and respect that [Bulcke] resigns from the position and not wait until April next year,” a top-30 Nestlé investor told the Financial Times. “Bulcke has lost the respect and the trust of investors.” Christopher Rossbach, a portfolio manager at J Stern and a long-term shareholder, said the successive misfires “make it time for decisive leadership at Nestlé” and urged incoming chair Pablo Isla to take over immediately rather than wait until his planned start in April 2026, the FT reported.

Shareholders have linked the governance concerns to a broader slide in performance. Nestlé shares have fallen about 40% since 2022 as sales stagnated and the company weathered product recalls, supply-chain controversies and intensifying competition from rivals such as Unilever. At the company’s annual meeting in April, nearly 10% of shareholders voted against Bulcke’s re-election as chair and another 5.4% abstained.

Some investors expressed surprise that the alleged relationship was not uncovered earlier. Former and current Nestlé executives told the Financial Times they regarded the relationship as an “open secret” inside the company, raising questions about oversight and whether senior directors were aware. "If it turns out that the chair knew more than he admitted, it will become clear that the company is suffering from weak governance and poor oversight," Kai Lehmann, a senior analyst at Flossbach von Storch, said.

Nestlé said Freixe’s dismissal was unrelated to Schneider’s ouster last year. Schneider’s departure followed clashes with the board over strategy and performance. Nestlé announced in June that Pablo Isla, the former Inditex chief who serves as lead independent director, will become chair in April 2026.

Investors urged a faster transition. Alexandre Stucki, founder of AS Investment Management, which represents members of the Nestlé founding family, told the Financial Times that Bulcke should have left when Schneider was forced out and said it was unlikely Bulcke would move on before April 2026. Other institutional investors criticized the board as weak and argued that an external chair might be needed to restore credibility.

Philipp Navratil, who steps into the CEO role after four years running Nespresso, takes charge amid mounting challenges. Analysts said his experience leading a single-brand business may not translate easily to oversight of Nestlé’s sprawling portfolio, which includes coffee, dairy, bottled water and confectionery. The company faces slowing consumer demand in key markets, persistent cost pressures from inflation, and reputational risks that have weighed on sales and margins.

For shareholders, the immediate test will be whether the board can restore trust and stabilise strategy. Some investors called for clearer separation of powers between the chair and management and for stronger independent oversight to prevent future governance lapses. Nestlé said it had appointed outside counsel for the investigation and that the board had acted when allegations were substantiated.

The company did not immediately respond to a request for further comment. Officials close to the board have said Pablo Isla has been active in recent decisions, including the steps taken in the Freixe case. Whether that involvement will be sufficient to reassure investors remains an open question as Nestlé confronts both operational headwinds and scrutiny of its leadership structure.