In this video, Jeff Furman explains how the independent board of directors of Ben & Jerry’s was formed when the company was sold to Unilever, what it does, and how Ben & Jerry’s might have a long-term effect on its big corporate owner. An edited transcript follows.
Ben & Jerry’s is owned by Unilever. Why does it also have an independent board of directors?
Because Unilever made a big mistake! (laughs)
When Unilever bought us in 2000, we had been struggling to keep the company independent for 18 months. Wanting to hold on to the company wasn’t a question of price. It was about our philosophy of business and our desire to maintain the social mission. But the pressure to sell became too intense.
Once we felt we had no choice, we negotiated sale agreements with Unilever that, as far as I know, are unique. They establish the independent board of directors, of which I am now the chair.
The board continues in perpetuity, and this is just one of several unique things about it. As we board members get older and grayer, we can bring in new people, and this goes on forever. Our main focus is to maintain the social mission of Ben & Jerry’s, and there are a lot of elements in this legally binding agreement that give us power.
For example, Unilever is not allowed to change the product’s ingredients without our permission. They can’t lower the quality. They also have to pay a living wage, and other things, and it is the board’s job to make sure those requirements are followed.
One of the interesting things in this story is the creative tension between making a profit and pursuing a social mission. That tension drove the company forward for many years, and it’s one reason why so many people love Ben & Jerry’s today. The sale agreements capture these two goals in writing, kind of like the US Constitution. Now the two governing bodies have to negotiate with each other for the organization to move on. Is that a fair characterization?
I think so. It’s also like the Constitution because it is very difficult to amend! (laughs) In fact, we haven’t changed the sale agreements at all since we signed them. We are continually struggling to figure out how to work together, because we’re coming at the issues from such different perspectives. For example, the board wanted to support the Occupy movement. So we came out as supporters of it in 2111 and Unilever had to let that happen, even though it ran contrary to what they would have done.
Ben & Jerry’s is about 1 percent of Unilever’s revenues. You are a tiny part of this enormous company. How can you influence something that is so big?
We’re a really successful company in financial terms, and that gives us credibility with them. And because we succeed by looking at things differently, as time goes on, Unilever is starting to adopt some of our ways. What I don’t know is whether we’re affecting the entire Unilever organization, or just the people who happen to be running it right now.