A coalition of investors is challenging ice cream giant Magnum over its handling of Ben & Jerry's social activism and a perceived lack of financial transparency, according to a letter seen by Reuters. The shareholders, who collectively hold at least $1.3 million in Magnum stock and manage billions in assets, have demanded clarity on how the company plans to uphold Ben & Jerry's board independence and provide separate sales and profit figures for the brand.
This pressure highlights the ongoing challenge that Ben & Jerry's, known for its vocal social activism, poses to The Magnum Ice Cream Company. Magnum spun off from consumer goods giant Unilever and listed publicly in December.
Background of the Dispute
Ben & Jerry's founders and board frequently clashed with its former parent, Unilever, over political and ethical stances. Magnum has since sought to diminish the control of Ben & Jerry's independent board, which has been reduced to just two members, prompting former directors to challenge Magnum's actions.
In a letter dated May 1, sent to Magnum's board ahead of its May 7 annual general meeting, shareholders led by NorthStar Asset Management expressed deep concerns over Magnum's management of Ben & Jerry's, warning it could damage the brand's business and value.
"They've dismantled the brand's social mission, which, for us as investors, is the brand equity," Whitney Nguyen, director of impact research at NorthStar, told Reuters.
Unilever's 2000 acquisition of Ben & Jerry's granted the brand substantial and unusual freedoms, including an independent board, to preserve its social mission and charitable work. Unilever still retains a 19.9% stake in Magnum.
Magnum's Response
Magnum responded in a statement, saying: "While we respectfully disagree with the characterisation presented by NorthStar, we are always happy to engage with shareholders and look forward to doing so."
The company added: "We remain committed to having a Board, led by an Independent Director, to continue its role of helping guide the social mission and brand integrity, alongside the CEO." Unilever declined to comment.
The relationship between Ben & Jerry's and its parent company began to unravel in 2021 when the Vermont-based brand announced it would stop selling in the Israeli-occupied West Bank. As the demerger approached, Magnum questioned the suitability of Ben & Jerry's independent board chair and later accused her of serious misconduct.
Investor Demands
The investors' letter called for a clear explanation of how Magnum would honor the Ben & Jerry's independent board agreement and demanded a full accounting of liabilities, including those arising from ongoing legal proceedings. "We are concerned that this independent board agreement has been consistently and systematically disregarded," stated the letter, which was also signed by the major Dutch Association of Investors for Sustainable Development (VBDO).
NorthStar, a socially responsible investing firm, suggested that Magnum's handling of Ben & Jerry's might cause other brands considering acquisition by Magnum or Unilever to reconsider. "The acquisition agreement has been systematically violated — from overriding board decisions, firing the chair and members who disagreed, to censoring the very social mission they were contractually obligated to protect," Nguyen said. "This is a significant governance failure that erodes shareholder trust and sets a deeply concerning precedent for every brand within the Magnum and Unilever portfolio."
