Why didn’t Diageo CEO Debra Crew get the chance she deserved? – Comment

A CEO’s departure “with immediate effect” is always going to set tongues wagging. Throw in “by mutual agreement” and we’re in full-on rumour-mill territory.

Both phrases appeared in today’s announcement from Diageo regarding its now-former lead, Debra Crew.

One thing that was missing from the regulatory filing confirming Crew’s departure after barely two years as group CEO was any kind of explicit explanation for the move. The closest we get to one is this, in the conclusion after chair John Manzoni’s thanks to Crew for her “contributions” to the brand owner: “We strongly believe Diageo is well placed to deliver long-term, sustainable value creation.”

Is the company better-placed to deliver that value creation now that Crew has gone? I’d argue they could have – even should have – waited at least three weeks before making today’s move.

There’s no denying that Crew’s tenure at the helm was born in a storm, with her start date almost exactly two years ago having to be brought forward following the surgical complications that resulted in the death of her predecessor, Ivan Menezes. As if having to navigate the company-wide mourning of Menezes’ passing wasn’t tough enough, more woe was to follow just five months later.

In a trading update in November 2023, Diageo warned of plummeting sales in ‘Latin America & Caribbean’ – thanks to its failure to monitor stock levels in its reporting region.

The warning was realised at the start of last year, with six-month sales to the end of December 2023 coming in down by the considerably less dramatic amount of 0.6% (‘LatAm & Caribbean’ fell 23%). While responsibility for the LAC mess could hardly be placed at Crew’s door so early into her tenure, she still admitted at the time that “we didn’t do good enough”.

The rate of top-line decline stayed the same for Crew’s first full year in charge; fiscal 2024 (to the end of June last year) also finished at -0.6% in sales terms. While by no means a stellar showing, this was still – at worst – in line with Diageo’s peers in spirits (and ahead of main rival Pernod Ricard, which was down 1% over the same period).

And, with Diageo less than three weeks away from announcing its fiscal 2025 (to the end of June) results, what are we to think of those numbers after Crew’s mutually-agreed, with-immediate-effect departure today?

Where I realy come unstuck, however, is here (below), when I look at 2014 and 2015.