Chairman’s statement
Strengths through leadership
‘Strong and sustainable businesses are characterised by committed and effective leadership at all levels of the organisation.’
In my business life I cannot recall a period of greater volatility than we have seen in the past year. Through it, Diageo has once again delivered a resilient performance despite these most difficult of circumstances. But to do so we have had to manage the business somewhat differently. In particular we have had to demonstrate great speed and flexibility to respond to the myriad of challenges which emerged in many of our markets. Our results show considerable success in doing so.
They also clearly demonstrate the importance of individual and corporate leadership in such unpredictable times. Strong and sustainable businesses are characterised by committed and effective leadership at all levels of the organisation. Recognising that, Diageo has invested significantly in its leadership capital through the Diageo Leadership Performance Programme. More than 900 of our senior managers were enrolled in the programme itself, while its principles, and many of the modules from which it was composed, were cascaded across the wider business. The results have been important. In the short term the Programme allowed us to create a consistency of purpose and approach in our response to the current economic turmoil. This has been characterised by speedier decisions and better execution putting those decisions into action.
In the longer term, we believe that we have built a solid foundation for the organisation. Today it is imbued with an even stronger sense of its values and in particular the need to retain the highest of standards through these difficult days. We recognise that Diageo can emerge from this period with an enhanced reputation if we continue to build a relationship of mutual trust with all of our stakeholders, but we also have to recognise that in some cases changing circumstances demand that we make major changes to our business footprint, even if this can be difficult and initially controversial. I remain convinced that in time we will receive credit for doing the right thing for the business, provided that we treat those who are impacted with compassion and respect.
We have also made additional and important investments toward securing industry leadership in the years to come. We have spent much time seeking to better understand the crucial role our customers play in choosing our brands versus those of the competition. That has led us to a significant investment in strengthening our sales capability. We are already seeing the added value of that investment.
We made changes to the Executive Committee and to the Board. Last Autumn the Executive Committee was extended to give us clearer lines of sight to every part of the organisation and every region in the world. I believe that move has been an important step and was a vital component of our quick response to the economic downturn. We have also announced the appointment of Peggy Bruzelius and Betsy Holden to the Board and said farewell to Bill Shanahan. We welcome Peggy and Betsy and we give Bill, who has made a memorable and lasting contribution to our deliberations, our thanks and very good wishes for the future.
Dr Franz B Humer
Chairman
Global volume share of premium spirits*
- 1 28% — Diageo
- 2 19% — Pernod Ricard
- 3 10% — Bacardi
- 4 6% — Brown-Forman
- 5 5% — Fortune Brands
- 6 32% — Other
* Source: Impact Databank Top 100 Premium Spirits February 2009
Dow Jones corporate sustainability assessment (%)
