In April 2000, Vermont-based ice cream maker Ben & Jerry’s sold itself to the British multinational giant Unilever. However, based on the purchase agreement, while Unilever gets to decide who should be the brand’s CEO, that CEO must defer to the Ben & Jerry’s independent board about the “social responsibility aspects of the company.” And while shareholders of publicly traded companies usually vote to decide board members, Unilever is only allowed to appoint two of the 11 seats on the brand’s board.
Recently, this purchase agreement has come under scrutiny, thanks to Unilever’s decision to sell its Israeli operations to a licensee that would market its products in the Israel-occupied West Bank. Ben & Jerry’s co-founder Ben Cohen said in an MSNBC interview that Unilever has “usurped their authority” by going against the wishes of Ben & Jerry’s independent board. Cohen said it “can’t allow that to happen, we can’t sit idly by.”
Ben & Jerry’s as a brand has long been known for its social advocacy, and in the past has advocated for such causes as ending modern slavery and the Black Lives Matter movement. Thus, in July, Ben & Jerry’s asked a federal court to stop Unilever from selling its Israeli business. The ice cream brand claimed that Unilever’s arrangement to market its products in the West Bank would cause irreparable harm to its social mission amongst consumers.
U.S. District Judge Andrew Carter in New York denied the request, ruling the purported harm was “too speculative.” But Ben & Jerry’s has said it plans to amend its lawsuit, in which case Unilever will have until November 1 to respond.
The 2000 deal filed with the Securities and Exchange Commission (SEC) as part of Unilever’s acquisition of Ben & Jerry’s stated that the parties agreed “the Surviving Corporation Board will have primary responsibility for preserving and enhancing the objectives of the historical social mission of the Company as they may evolve from time to time consistent therewith.”
The social responsibility aspects of the deal, specifically the independent board’s power, are what co-founders Cohen and Jerry Greenfield thought of as the bedrock of the purchasing agreement.
“In order for us to sell the company, it was essential that we had this agreement in place,” Greenfield said on MSNBC, “and without that agreement, the sale never would have occurred.”
