Peter Brabeck assumed the top spot at Nestlé in 2008, after overseeing its strategic transformation into the world's foremost nutrition company. Since joining Nestlé in 1968, he has been in leadership positions in multiple countries, including Chile, Ecuador, and Switzerland. Since 1987, he has been based at Nestle's headquarters in Vevey. Mr. Brabeck is the Chairman of the board of directors of Nestle (since 2005). From 1997 to 2008, he was also the CEO of Nestle. Mr. Brabeck-Letmathe is a member of the boards of directors of L'Oreal SA, Paris (since 1997), and Roche Holding SA, Basel (since 2000). He is also a member of the Foundation Board of the World Economic Forum and a member of the European Round Table of Industrialists.
Question: What is the nature of the path to sustainability?
Peter Brabeck: Well, I think if anything, the financial crises which then swept over of course to the real economy, has shown us is that it is not enough for business only to create value for its shareholders. This was the paradigm of the 1990's and the early 2000’s. Everybody was demanding the creation of shareholder value. You will not be able to create shareholder value if you are not at the same time creating value for the society as such. That, I hope was the most important lessons that we should be taking out of this recent crisis that we have.
So, I think this is becoming more and more understood by many of colleagues, especially I would say perhaps more clearly so by those who are working in the real economy and I hope that the financial world will also start to better understand that it's not all about money, but that it is also about values.
Question: Many executives have cited the financial crisis as a roadblock to promoting sustainable business practices. What do you say to them?
Peter Brabeck: I certainly believe it's a great opportunity. I mean society at large has become exposed to what short-term is and focusing on shareholder value can bring. And I think this waking up now, this better understanding that this model is outdated, and that we have to replace it with a new model. A model that, as I mentioned before, takes into consideration the interests of not only the shareholders, of course the shareholders, and shareholders will always be -- we have a responsibility to them, but we also have to take the other interests of society at large into consideration. I hope, and I can feel it.
Recorded on February 24, 2010