Corporate Governance Gone Wrong: What California CEOs Can Learn from the Ben & Jerry’s–Unilever Clash

Posted in Blog

By Tony Liu, Founder and Principal Business Trial Attorney 

In Summary: 

When a brand as beloved as Ben & Jerry’s finds itself in open conflict with its parent company, Unilever, it’s more than a headline—it’s a cautionary tale. This ongoing battle over governance, control, and contractual obligations shows how even carefully structured agreements can fracture under pressure. For California CEOs, the lesson is clear: corporate governance disputes aren’t rare—they’re inevitable when authority, vision, and values collide. Protecting your position, your company’s mission, and your legacy requires foresight, precision, and strong legal safeguards. 

When Business Values and Governance Collide 

The 2000 Merger Agreement

In 2000, when Ben & Jerry’s sold to Unilever, the founders insisted on an unusual safeguard: an independent board tasked with protecting the company’s social mission. The deal was not just financial—it was about preserving the integrity of a brand that built its reputation on activism.

The 2025 Flashpoints

By 2025, this arrangement unraveled in dramatic fashion.

• CEO Ouster: Ben & Jerry’s sued Unilever, alleging the parent company improperly removed its CEO in retaliation for supporting progressive political stances. 
• Restriction of Speech: The lawsuit also claims Unilever tried to muzzle the brand on issues like Gaza and U.S. politics. 
• Independent Board Authority: Ben & Jerry’s argues Unilever violated the merger agreement by stripping the board of its intended power. 
• Founder’s Resignation: Jerry Greenfield, co-founder, stepped down in September 2025, stating that the company’s independence had been “usurped.”

These disputes, still unfolding in court, illustrate how fragile governance protections can become—even when inked into a merger agreement.

Why This Matters Beyond Ice Cream

The case is not about flavors or slogans—it’s about corporate governance, contractual promises, and whether mission-based safeguards survive in the face of shareholder pressures. California CEOs, particularly those navigating mergers, acquisitions, or outside investment, should take note: once governance breaks down, litigation and reputational damage often follow.

The Legal Core of Governance Disputes 

Breach of Merger Agreements

At its core, Ben & Jerry’s alleges that Unilever breached the 2000 merger contract. In California, breach of contract claims in M&A are among the most litigated disputes, especially when governance promises—like independent board authority—are vague or unenforceable.

Fiduciary Duties and Independent Boards

Independent boards exist to safeguard minority interests or protect specific missions. But if their role isn’t crystal clear under California law, they risk becoming symbolic. Courts often scrutinize whether directors acted in good faith and whether parent companies honored contractual limits on control.

Commercial Interests vs. Brand Values

The Ben & Jerry’s dispute reflects a larger reality: mission-based governance often clashes with profit motives. For CEOs who prize their brand’s integrity, this is a warning that without strong legal teeth, values can be sidelined when financial or political pressures mount.

The California Context—Why CEOs Should Pay Attention 

Governance Disputes in California

California companies frequently face disputes over board authority, fiduciary duties, and contractual promises made during mergers or acquisitions. Cases often center on:

• Who controls the boardroom.
• Whether independent directors have true veto power.
• How fiduciary duties are balanced with contractual rights.

Local Relevance for Orange County Executives

Executives in Orange County and throughout Southern California often deal with high-value mergers, private equity acquisitions, and joint ventures. These arrangements carry significant risk: once governance protections erode, litigation can cost millions and tarnish reputations.

Case Studies Beyond Ben & Jerry’s

California courts have repeatedly handled cases where founders, minority shareholders, or independent directors claimed that contractual governance promises were ignored. The lesson is consistent: without enforceable agreements and proactive monitoring, governance structures fail.

How California CEOs Can Protect Their Interests 

Elements of a Perfect Outcome

For business leaders, the ideal resolution of governance disputes looks like this:

• Governance promises honored.
• Mission and brand integrity respected.
• Reputation preserved.
• Financial stability maintained.
• A clear exit path if needed.

Preventative Strategies Before a Deal

The most effective protection happens before signatures dry:

• Negotiate with Precision: Spell out governance rights, independent board powers, and veto mechanisms. 
• Mission Clauses: If brand integrity or social mission is important, draft enforceable “mission protection” clauses. 
• Due Diligence: Don’t assume alignment; verify how governance will function post-acquisition. 

What to Do if Governance Promises Are Breached

When disputes erupt:

1. Document everything. Emails, board minutes, and agreements become critical evidence. 
2. Seek mediation or arbitration. Many M&A agreements require it, and it can resolve conflicts faster than litigation.
   
3. Use litigation strategically. Courts can enforce governance terms or award damages, but lawsuits carry reputational risks.

Lessons from the Ben & Jerry’s Case for California Executives 

• Goodwill is not governance. Trust and handshake agreements collapse without strong legal backing. 
• Independent boards need teeth. Symbolic boards won’t stop parent companies from exerting control. 
• Forced CEO removals are common triggers. Leadership disputes often signal deeper governance breakdowns. 
• Reputation and mission must be protected contractually. Values don’t enforce themselves.

Frequently Asked Questions 

1. What is a corporate governance dispute in California?

It’s a conflict over how a company is controlled—often involving board authority, fiduciary duties, or enforcement of shareholder/merger agreements.

2. How can independent boards protect brand integrity after a merger?

Only if their authority is clearly defined and enforceable in the merger agreement. Otherwise, they risk being advisory rather than controlling.

3. What legal recourse do CEOs have if merger agreements are breached?

They can pursue mediation, arbitration, or litigation for breach of contract and enforcement of governance provisions.

4. How do courts in California handle disputes over board authority?

Courts look at statutory requirements under the Corporations Code and the language of the merger or shareholder agreement. Ambiguities are often decided against the party seeking broader authority.

5. What steps can business owners take to prevent governance disputes during M&A?

Negotiate enforceable agreements, define board powers precisely, and consult corporate governance attorneys before closing the deal.

Protect More Than Profits—Safeguard Your Legacy in Every Deal

The Ben & Jerry’s–Unilever dispute is more than a corporate feud—it’s a warning for every California CEO. Even ironclad agreements can unravel if governance protections are weak or unenforced. The stakes aren’t just financial; they include brand integrity, reputation, and legacy.

Every deal is a test of foresight. Those who protect their governance rights early avoid being sidelined later.

If you’re facing a corporate governance dispute—or preparing for a merger or acquisition—speak with an experienced business litigation attorney in Orange County today. Protect your company, your mission, and your legacy before conflicts escalate.