Nestlé is under increasing pressure from investors following the abrupt dismissal of CEO Laurent Freixe, marking the second executive departure in just over a year.

This latest upheaval has led shareholders to call for the resignation of chairman Paul Bulcke, who is being held accountable for a period characterised by instability and declining performance.

Freixe was ousted last week due to allegations of an undisclosed romantic relationship with a subordinate, a situation that has raised serious governance concerns among Nestlé’s investors.

Bulcke, who appointed Freixe only a year prior, is now facing scrutiny over his decision-making processes and the handling of the situation.

One major shareholder expressed that Bulcke should resign immediately rather than wait until his scheduled departure in April 2026, stating: “He has lost the respect and trust of investors”.

The leadership crisis at Nestlé began with the ousting of former CEO Mark Schneider in August 2024, followed by Freixe’s swift removal, leaving the company with a leadership vacuum.

In a bid to restore stability, Nestlé has appointed Philipp Navratil, head of the Nespresso division, as the new CEO. However, the rapid succession of CEOs has led to questions about the company’s governance and strategic direction.

Investor sentiment has soured, with Nestlé’s shares plummeting approximately 40% since 2022, exacerbated by a series of scandals and sluggish sales.

The board's handling of Freixe’s conduct has been particularly troubling for shareholders. Following initial reports through Nestlé’s whistleblowing channel, an investigation was launched but failed to substantiate the claims against Freixe.

It was only after further complaints that a second investigation revealed evidence of the relationship, raising alarms about the effectiveness of the company’s governance structures.

According to the Financial Times, Nestlé’s spokesperson has defended the board’s actions, stating that the two CEO departures were “entirely unrelated” and that Freixe’s actions were a “clear breach” of company conduct policies.

Yet, the perception among investors is that the board’s oversight has been lacking, with some questioning how Bulcke could have been unaware of what many described as an “open secret”.