Heineken CEO Dolf van den Brink, Unilever CEOs Hein Schumacher (June) and Alan Jope (prior), Philip Morris CEO Jacek Olczak, Mondelez CEO Dirk Van de Put, and Nestle CEO Ulf Mark Schneider have all demonstrated a lack of ethical behavior. Each of their organizations promised to exit business in Russia when war began. These leaders have not delivered on that promise.
Why Business Leaders Promised to Exit Russia
When Russia attacked the sovereign nation of Ukraine, unprovoked, the world was angry. Great leaders denounced Vladimir Putin for his unilateral aggression.
In the 500 days since, Russia attacked hospitals, schools, and infrastructure. To date, Putin’s military killed over 9,000 civilians, including 500 children, and injured more than 15,000.
As a result of this senseless attack and repeated violence against innocent families and children, more than 1,000 businesses pledged to stop working with and in Russia. Most stood by their commitments and exited business in the country – even at great financial cost.
Leaders Who Have Not Kept Their Promise
The few who pledged to leave Russia but remain include:
Yale Professor Jeff Sonenfeld, who tracks these businesses, their profits from Russia, and their failure to deliver to on commitments to their stakeholders, said:
“Consumers should realize that by supporting these companies, they’re endorsing something that fuels Putin’s war machine.”
Heineken is the worst offender. According to Sonenfeld. Heineken owns and operate 7 breweries in Russia. What’s worse, Heineken actually launched new brands in Russia since the start of the war. Launching new businesses in the country, as competition decreases, has actually been called war-profiteering by some.
Common Reasons for Not Exiting
Public relations for these leaders claim their departure is hampered by dependencies upon Russian regulatory approvals, minimizing revenue loss, or avoiding turning over assets to the Russian government. In contrast, organizations who rapidly and successfully exited Russia include companies like McDonald’s, Starbucks, BP, and ExxonMobil.
Do these leaders expect us to believe the other companies had less of a challenge? Instead, the difference we see is leaders who stood by their commitments and those who did not. We see companies who stand by their values and those who do not.
“A bar of Dove soap starts to look pretty dirty when there are enough of them being produced to purchase a Russian tank,” – Mark Dixon, Moral Rating Agency Founder
What About Employees in Russia?
One defense that seems to align with good leadership intent is minimizing the impact to Russian employees. However, as Sonenfeld points out, we can look at apartheid in South Africa as an example:
The goal of the corporate exodus is to increase pressure on Putin’s regime. As a model, he (Sonenfeld) pointed to the divestment movement by major Western brands from South Africa in the late 1980s during apartheid. – CNN
The exodus of western business then had a major impact and helped bring about the end of apartheid. Furthermore, these companies have the alternative option of exiting their business in Russia while still providing assistance to former employees. Instead, the businesses remain, profiting during the war and playing a role in enabling and empowering the Russian war machine.
Heineken, who has expanded business, has no excuse. For the rest, it may be a matter of priorities.
Many companies can point to small changes they made to decrease business in Russia. Yet again, competitors have done more to demonstrate their commitment and values.
It is our hope educating customers and investors will motivate these brands to recommit to their decision to leave Russia. Furthermore, as these companies have profited more than most from the war, it seems only fair they should make substantial investments to charities and rebuilding efforts in Ukraine.
Let’s not forget the companies who profited when the time comes to rebuild Ukraine.
Brands Supported by These Unethical Leadership Decisions
If you believe in capitalism and good leadership, invest your money with businesses who stand by their values. Stop purchasing products from the following brands* until their leaders stand their promises:
8⃣ Lipton Tea
* This is a partial list. Please add any missing brands in the comments.
Much of the facts and data from this article came from the following article on CNN: https://www.cnn.com/2023/07/10/business/russia-companies-leaving-putin/index.html
This article also appeared on our LinkedIn Newsletter at: https://www.linkedin.com/pulse/unethical-leaders-capture-profits-from-russias-ben-lichtenwalner-mba/
The post Unethical Leaders Capture Profits from Russia’s Invasion of Ukraine appeared first on Modern Servant Leader.