A high-profile investor has written an open letter to Unilever chief executive Paul Polman, urging him to resist the temptations of “short-termism” in the wake of the aborted takeover attempt by Kraft.
Richard Buxton, chief executive of Old Mutual Global Investors, published his letter in response to recent statements from Unilever that it would undertake a strategic review with the aim of delivering more value to shareholders.
Buxton writes that Unilever and Polman have been widely known for their long-term sustainable business model, and that a change in tack could jeopardise that.
He insists that just because Kraft attempted a takeover does not mean Unilever should defend itself by adopting the same business model.
Writing in The Sunday Times, he says: “Unilever is a poster child for the pursuit of long-term, sustainable returns. 3G/Kraft Heinz is a throwback to the 1980s antics of the late Lords Hanson and White.
“Do not succumb to the voices of short-termism. Rally your board, employees and shareholders around your business model and balance sheet. It is not just Unilever at the crossroads: the right or wrong sort of capitalism is at stake.”
He adds: “Naturally, you and your board are scarred and scared by this approach. You feel the need to respond. Turn this into a different battle. Not one against Unilever, but against business models. Defend a strong balance sheet. It is not a sign of corporate weakness.”