Sara Lee, the US food and household goods group, has bowed to pressure from one of the world’s largest pension funds and agreed to separate the role of chairman and chief executive.
After talks with Norges Bank Investment Management, Sara Lee’s board said it would recruit an independent chairman when Brenda Barnes’ tenure as head of the group ends.
A Sara Lee spokesman said the group had responded to NBIM’s request in the light of a slow but growing trend in the US towards splitting the role of chairman and chief executive.
NBIM, which manages $300bn of Norway’s central bank assets, making it the world’s second largest retirement scheme, this week launched a campaign to persuade a series of US companies to separate the chairman from the chief executive role.
NBIM is calling on Harris Corporation, Parker Hannifin, Cardinal Health Inc and Clorox to split the roles of chief executive and chairman. It has also voted against all chairmen that are also CEOs of about 700 US companies.
It, like many corporate governance activists, argues that the two roles are different and should not be held by the same person. All companies should ensure there is a clear division between the responsibilities to ensure a balance of power, it says.
NBIM estimates that about half of the top 1,500 companies in the US combine the role of CEO and chairman.
NBIM started its campaign by submitting proposals to four US companies calling for a shareholder vote on the appointment of an independent director to chair the boards.
It withdrew a similar resolution calling for a shareholder vote at Sara Lee’s annual meeting on October 29 after the food group agreed that it would recruit an independent chairman.
Anne Kvam, NBIM’s global head of corporate governance, says this followed “very constructive dialogue with the board of Sara Lee and [we] are very happy with the outcome”.
No leaving date has been set for Ms Barnes, who has been chairman-chief executive of Sara Lee since 2005 and is taking the group, which is best known for its frozen gateaux, cheese cake and coffee, through a five-year period of restructuring to focus on its core food and beverages business and cut costs.
Last month it agreed to sell its personal care business, which includes Radox bubblebath and Brylcreem, to Unilever for €1.27bn ($1.9bn) in cash. The US group is looking at further sales of its household goods business in the next few months.
The decision to sell its household business, which contributed some 17 per cent of Sara Lee’s total revenues of about $13bn, comes as the g