Ailing Hershey Shuffles its Boardroom Pack

13 November 2007

LANCASTER, Pennsylvania: Lackluster US confectionery giant Hershey is reeling from a radical shake-up that resulted in the hasty departure of eight board members.

The Hershey Trust, which controls the company's assets, announced a month ago the surprise retirement of ceo Richard Lenny. It says it implemented the latest reshuffle because it is not "satisfied with company's recent results".

Six of the eight board members quit after being asked for their resignation by the Trust, while two decided to leave of their own volition.

Among the new boardroom faces are Stone Point Capital ceo Charles Davis and Edward Kelly, MD of private equity firm Carlyle Group.

Former Hershey ceo Kenneth Wolfe, who retired six years ago, is returning as non-executive chairman.

The trust called the company's stock decline over the past few years "a very serious matter ... for all shareholders".

In the past six months the stock lost a further 25% of its value as the firm strugggles with rising costs and stiff competition from arch rival Mars. Last month it posted a 66% drop in quarterly profit.

However some observers see the latest boardroom changes as little more than a repositioning of the deckchairs on the Titanic.

Opines Walter Todd, a principal at Greenwood Capital Associates: "This seems like action for action's sake. It's not the board of directors that underinvested in advertising for the last five years. Honestly, this won't change the loss of market share or competition from Mars."

Data sourced from New York Times and; additional content by WARC staff