Scribd
Upload
16 views18 pages

ben and jerry slides 2024_final

case study ben and jerry

Uploaded by

Vinh Nguyễn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
16 views18 pages

ben and jerry slides 2024_final

case study ben and jerry

Uploaded by

Vinh Nguyễn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 18

Ben and Jerry’s

Corporate Objective Function and other CSR


consideration
Case Objectives

■Reflect on how CSR considerations might affect firm’s


performance;
■Introduce asset control restrictions (or anti-takeover
measures) and reflect on takeover dynamics
■Introduce simple multiple analysis
Background

■ Set in 2000
■Company founded in 1978
■The board is assessing four offers with different price and
integration condition
Company mission statement

Three pillars:
1. Economic - aim for economic growth to create value for
shareholders and employees
2. Social - have a social impact to support the community at large
3. Product - do not compromise the quality of their products
What determines corporate policy at Ben and Jerry’s?
How did they fulfil their mission statement

■Was their mission statement just self-promotion and


“greenwashing” ?
■caring capitalism
■ Can we provide an example??
■Other companies with the same approach:
■ B Corporations - https://www.bcorporation.net/en-us/
Can we expect B&J to excel in all of its multiple
objective?

■Why?
■Jensen’s 2005 – Value Maximisation vs Stakeholder Theory
■ “in a free society, and have said that in such a society, there is one and only one social
responsibility of business—to use its resources and engage in activities designed to increase its
profits so long as it stays within the rules of the game, which is to say, engages in open and free
competition without deception fraud.” (M. Friedman, 1970, NYT)
(A Friedman doctrine‐- The Social Responsibility Of Business Is to Increase Its Profits - The New York
Times (nytimes.com)
Value Maximisation vs Stakeholder Theory

■ Jensen comments:

■ And proposes the “enlightened value maximisation”


What is the cost to shareholders (if any)?
or how much are shareholders giving up?

■ What information do we have?


■Financial ratios from Ex. 1  Good or bad?
■Stock price chart from Ex. 2  Good or Bad?
■Comparables from Ex. 3  what is the company’s stock price
at the time?
 what can we conclude about the company’s
performance?
What is the impact of the asset-control devices used by
management and the state of Vermont on the firm’s
decision making process?

■In a well-functioning market for corporate control, control


should be contested when companies are poorly performing.
■The control transferred to investors that are better able to put
the existing resources to their best use
■The fact that B&J had become a takeover target by many
companies seems to confirm there was value to be created.
Asset control restrictions

■What’s their purpose?


■ Let’s take a look at the ones they have in place.
1. Dual class shares
2. Staggered board
3. Supermajority
4. Vermont regulation
5. Board independence ??
The offers

■What do these offers tell us about B&J performance?


■All offers at a significant premium over the company’s current
stock price.
■Market believes there is value to be created from an
acquisition
■Which offers would you want B&J to accept?
■All offers implied some curbing of the company’s social
endeavours
■Difficult to say what will happen as these often “deal
sweetener”
The epilogue
■On April 12, Unilever raised the offer to $43.6 (while the
other bidders had also raised their bids to $38)
■The board accepted the offer.
■B&J was taken private. Later the CEO was replaced and the
social agenda substantially trimmed.
■….present day…
■Ben and Jerry's - Certified B Corporation - B Lab Global
Bayes Business School (formerly Cass)
106 Bunhill Row
London EC1Y 8TZ
Tel + 44 (0)20 7040 8600
www.cass.city.ac.uk

You might also like