The abortive attempt by Unilever to move to a single listing for its shares in Rotterdam, at the expense of London, has been described in much of the media as a victory for corporate governance.
The Unilever board had misunderstood the concerns of many of their UK investors and accepted that they were unlikely to get the required 75% vote through. The company has been criticised for not consulting more widely with its shareholder base, before pushing the button on the proposed move. There have been calls for several corporate heads to roll, as a result.
And yet I wonder whether there is a wider story at play here, which revolves around fundamentally different views of the world between the senior management of large multi-national companies with a truly global footprint and some of their stakeholders.
Although many of the investment management houses have a global footprint, the responsibilities of many fund managers and research analysts are defined by geographical boundaries. As an ex-research analyst, I did initiate global coverage of my sector a few years ago but struggled to access all investors who often remained resolutely segmented by geography. So portfolio managers running a UK-only investment fund would face a real issue in finding exposure to a large multi-national food company listed in the UK if Unilever was no longer there; and even if they widened the selection to broader consumer companies, the list, including Diageo and RB, would be relatively short.
I am reminded of the debate in political circles since the EU Referendum vote in 2016. In the aftermath of that vote, The Road to Somewhere, by David Goodhart, was published which tried to explain the difference between the Remainers and the Leavers by reference to two tribes: the Anywheres see the world from a global perspective; the Somewheres are more rooted in geographical identity. So Unilever risks coming across as the Anywheres, whilst some of their stakeholders appear to be Somewheres.
Working in the financial communications industry, we tend to advise our corporate clients to up the level of communications with all their major stakeholders. The Unilever example perhaps points to a greater need to listen to your stakeholders and not to assume that they come from the same “tribe” as you do.
With Brexit and global trade wars very live issues, there is a risk that the gap between the Anywheres and the Somewheres could continue to widen further. As the Unilever board has found out, it is dangerous to assume that all your stakeholders hold the same view of the world as you do.