The Nestlé Management And Leadership Principles

PrinciplesMandatorySeptember 2011The Nestlé Managementand Leadership Principles

PrinciplesMandatorySeptember 2011Issuing authorityChief Executive OfficerTarget audienceAll employeesApproverExecutive Board of Nestlé S.A.RepositoryAll Nestlé Principles and Policies, Standards andGuidelines can be found in the Centre online repository ll rights belong to Nestec Ltd., Vevey, Switzerland. 2011, Nestec Ltd.In case of doubt or differences of interpretation,the English version shall prevail.DesignNestec Ltd., Corporate Identity & Design,Vevey, SwitzerlandProductionAltavia SwissPaperThis report is printed on BVS, a paper producedfrom well-managed forests and other controlled sourcescertified by the Forest Stewardship Council (FSC).

Table of contents3CEO message4Nestlé – A people-inspired company5Leading the “Nestlé way”6A decentralised and aligned organisation7A mutual commitmentThe Nestlé Management and Leadership Principles1

2The Nestlé Management and Leadership Principles

CEO messageNestlé – over its long historical development froma small town operation to the world’s leadingNutrition, Health and Wellness company – hasdemonstrated an exceptional capability to adaptto an ever-changing external environment.The core values and principles that haveguided this journey and are fundamental to ourCompany’s success are articulated in the NestléManagement and Leadership Principles, firstissued in 1997 and revised in 2003.They describe the culture, values andprinciples we expect our employees to uphold;as well as the attributes needed to be successfulin a management and leadership position atour Company.This third version of the document incorporatesour commitment to the concept of CreatingShared Value. In addition, it emphasises theimportance of behaviours supporting continuousimprovement in building a Company focusedon total performance.The Nestlé Management and LeadershipPrinciples are also in full alignment with theNestlé Corporate Business Principles, in which“Leadership and Personal Responsibility” aresingled out as key operational principles. Theyare also aligned with the Nestlé Code of BusinessConduct, which establishes non-negotiableminimum standards of employee behaviourin key areas.At Nestlé, we believe that a comprehensiveleadership style – leading to win, managingfor results, growing talent and teams, andproactively competing and connecting withthe external environment – provides thecompetitive edge to create shared value forour shareholders and for society.All Nestlé people should carefully read thisdocument and share it with their colleagues.They should take pride in adhering to theCompany’s values and implement them withconviction and enthusiasm – regardless oftheir formal position in the organisation. Inaddition, our managers and leaders havethe responsibility to practice the leadershipattributes described in this document.The Nestlé Management and Leadership PrinciplesI invite you all to live by the values andprinciples described in this document, andsupport our Company’s firm commitmentto them. Through the pragmatic combinationof a clear long-term vision and the achievementof day-to-day goals, the application of theseprinciples everywhere, and at all times, becomesa living expression of our corporate cultureand a key component of our future success.Paul BulckeChief Executive Officer3

Nestlé – A people-inspired companyWe put people at the centre of everything we do.Nestlé is more oriented towards people, productsand brands than systems. We show particularconcern for the well-being of our employees andconsumers.The Company is committed to the followingcultural values, which come from its Swiss rootsand uphold the dynamic nature of the Company: Focusing on long-term business developmentwithout losing sight of the necessity tocontinuously deliver sound results for ourshareholders. Creating Shared Value as the basic way we dobusiness. In order to create long-term value forshareholders, we must create value for society. Committing to environmentally sustainablebusiness practices to protect futuregenerations. Making a difference in everything we do byhaving passion to win and creating gaps withour competition through discipline, speed andflawless execution. Understanding of what constitutes value forour consumers and a clear focus on deliveringthis in everything we do. Serving our consumers by constantlychallenging ourselves to achieve the highestlevels of quality for our products and nevercompromising on their safety standards. Continuous improvement towards excellenceas a way of working and avoiding abrupt,one-time changes. A contextual approach to business rather thana dogmatic one. This implies that decisions arepragmatic and based on facts. Respect for and openness to diversity ofcultures and traditions. Nestlé endeavours tointegrate itself into the cultures and traditionswhere it is present, while staying true to theCompany’s core values and principles. Personal relations based on trust and mutualrespect. This implies a commitment to alignactions with words, to listen to differentopinions, and to communicate openly andfrankly. Commitment to a strong work ethic, integrityand honesty, as well as compliance withapplicable laws and Nestlé principles, policiesand standards.4The Nestlé Management and Leadership Principles

Leading the “Nestlé way”Nestlé managers at all levels are more concernedwith leading and inspiring people to add valueto the Company and society rather than withexercising formal authority. This calls for a highpersonal commitment of each employee and acommon mindset geared towards results.In an increasingly dynamic world, leaders facesignificant challenges and opportunities. Thesestem from shifts to new social patterns andunprecedented worldwide competition. Achievingongoing success requires that each Nestléleader understands the context and capitaliseson it, as described in the following principles:Lead to win Has built credibility as a result of coherentaction, leadership and achievement. Is able to think from different perspectivesand to create a climate of innovation. Thisimplies openness to risk and the possibilityof making mistakes, but also the willingnessto correct and learn from them. Believes in the importance of alignmentand management of expectations. Has broad interests, a good generaleducation, responsible behaviour as wellas a balanced lifestyle.Manage for results Embraces personal commitment and couragein execution. This includes the capacity andthe willingness to take initiatives and riskswhile maintaining composure under pressure. Values proactive cooperation in order to createsynergies at local, regional and global levels. Embraces change and is able to implementit and manage its consequences. Believes in achieving business objectivesrooted in compliance and sustainablepractices.The Nestlé Management and Leadership PrinciplesGrow talent and teams Has a passion for building and sustainingan environment where people have a sense ofpersonal commitment to their work and givetheir best to promote our Company’s success. Cares for and develops the leaders oftomorrow through addressing all areas thatallow them to progress in their work and toexpand their capabilities. Understands the importance of continuouslearning and improvement, as well as sharingknowledge and ideas freely with others. Is committed to giving and receiving honest,accurate and timely feedback, includingperformance evaluation, in a climate ofmutual respect. Believes in the importance of buildingdiverse teams, and promotes the advantagesof gender balance.Compete and connect externally Constantly looks for ways to satisfy ourconsumers and customers while attractingnew ones in unique and compelling ways. Displays curiosity and open-mindednessas well as a high level of interest in othercultures and lifestyles. Believes in openness and dialogue withoutside stakeholders about future trends insociety, technology, consumer habits, andbusiness opportunities. Understands the external impact of ouroperations and, as a result, proactivelyseeks to engage and partner with thecommunity, authorities, shareholders andother stakeholders.5

A decentralised and aligned organisationIn addition to how our managers carry out theirwork as leaders, Nestlé pragmatically implementsthe following organisational principles: Being as decentralised as possible to optimallyrespond to the needs of consumers, withinthe framework defined by our fundamentalpolicies, strategic directions and operationalefficiencies. Ensuring collaboration of all Nestlé businessesand compliance with Nestlé principles, policiesand standards (Nestlé in the Market approach). Building and maintaining a structure whichassures operational speed, with a strongfocus on results and removing unnecessaryobstacles. Establishing flat and flexible organisationswith minimal levels of management and broadspans of control, which also enable peopledevelopment. Setting a shared vision and commongoals to leverage the strength of people andorganisational alignment. Defining clear levels of responsibility.Teamwork does not affect the manager’sduty towards his/her people and businessresults.A team must always have a leader whoassumes full responsibility.6The Nestlé Management and Leadership Principles

A mutual commitmentLiving up to the Nestlé Management andLeadership Principles is a commitment and aresponsibility for everyone in our Company.To be effective, engaging and inspiring, allNestlé people must “walk the talk” and leadby example in their daily work; in this context,actions speak louder than words.Therefore, at Nestlé, in addition to professionalskills – and regardless of origin, nationality,religion, race, gender, sexual orientation andage – the capacity and willingness to live upto these principles are the key criterias forprogressing within the organisation.The Nestlé Management and Leadership Principles7

The Nestlé Management and Leadership Principles 1 able of contentsT 3O message CE 4 Nestlé – A people-inspired company 5 Leading the “Nestlé way” 6 A dec