Great care went into the arrangement: If Ben & Jerry’s was to be acquired by the multinational group Unilever, the company’s activist soul and freedom to act had to be preserved.
That led to an unusual structure built around an independent board charged with protecting Ben & Jerry’s social mission and key elements of the brand’s integrity.
The bulwark held for 20 years. Then a dispute over ice cream sales in the Israeli-occupied Palestinian territories proved too much.
Ben Cohen is now openly fighting the owner of the ice cream brand he founded with Jerry Greenfield in 1978, while former members of Ben & Jerry’s independent board are waging a legal battle over the right to defend the company’s social mission.
How did it come to this?
Was the structure not as strong as it appeared on paper?
And is it even possible to build an impenetrable defense around a company’s purpose while handing control to a new owner with far greater financial resources?
That is what this article examines.
More Than a Fight Over an Ice Cream Brand
Impact Insider has previously described how Ben Cohen is fighting The Magnum Ice Cream Company on several fronts.
He wants to force the company to sell Ben & Jerry’s so that it can be re-established as an independent business, free to pursue the social and activist agenda for which the brand is known.
The Article in Brief
* The structure around Ben & Jerry’s was not an unqualified failure. The independent board and the agreement with Unilever allowed the social mission to flourish for more than 20 years.
* Antony Page and Christoph Bietz disagree about when decisive control was lost. Bietz points to the initial public offering, while Page argues that outside capital and a public listing could have been combined with stronger protection of control.
* They agree on the central lesson: When interests collide, contracts, purpose clauses and independent boards are not enough. Ultimately, what matters is who controls the company.
* Control and economic rights can be separated through structures such as an enterprise foundation, a purpose trust or dual-class shares. That can protect the purpose, but it may also make it harder to raise capital or reduce the company’s sale price.
* No legal safeguard is completely impenetrable. The guardians of the purpose need both clear rights and the financial resources to enforce them when the spirit of an agreement is no longer enough.
The Ben & Jerry’s story is therefore about more than an ordinary change of ownership in the corporate world.
It has become a test of a fundamental idea among social entrepreneurs and purpose-driven companies: A company can be more than a vehicle for generating returns for its owners. It can also be a powerful tool for positive change.
But if that idea is to endure, a company’s purpose must withstand new owners, shifting interests and conflicts that were difficult to foresee when the legal documents were signed.
That is why the dispute over Ben & Jerry’s matters far beyond the company itself.
One close observer of the fight is Christoph Bietz. He is communications and PR lead at the Purpose Foundation in Hamburg, which advises purpose-driven companies and promotes awareness of steward ownership.
From Bietz’s perspective, the fight demonstrates why a company’s values and mission must be secured through its ownership structure.
“I think we can only win from that case,” he says.
Even if Cohen and the independent board fail to free Ben & Jerry’s, the case will still send a clear message to other purpose-driven companies.
“That’s actually our main, the most simple message: Ownership matters,” Bietz says.
If they succeed in buying Ben & Jerry’s and giving the company a purpose-bound ownership structure, it could instead become a new international model, he adds.
Was the Sale to Unilever Really Inevitable?
We will return to Bietz and the future of Ben & Jerry’s later. First, we need to look back.
Ben & Jerry’s was sold to Unilever in 2000. Today, the company is part of The Magnum Ice Cream Company, which has been spun off from Unilever.
The sale of the publicly listed company was controversial.
Ben Cohen led an investor group that was prepared to pay $38 a share. Unilever offered $43.60.
The board faced significant pressure to accept the higher bid. During the negotiations, shareholders filed three class-action lawsuits accusing the directors of failing in their duty to maximize shareholder value.
Cohen protested but ultimately had to concede. He and Jerry Greenfield have since described the situation as coercive: The board felt it had no real alternative to accepting the offer.
Legally, however, the board was not compelled to sell, according to Antony Page.
Page is dean of Chapman University’s law school and an internationally recognized corporate law scholar whose work focuses particularly on social enterprise.
He has followed the Ben & Jerry’s case closely for more than 15 years. In 2010, he and law professor Robert A. Katz analyzed the sale to Unilever.
Their analysis challenged the idea that the Ben & Jerry’s board was legally required to accept the offer.
The company already had several defenses that could, in principle, have been used to block the sale and preserve its independence, they argued. The central problem was not corporate law itself, but how the defenses had been designed — and whether anyone was willing to use them.
Page’s assessment has not changed.
“Ben & Jerry’s was not legally required to sell to Unilever. I stand by that conclusion,” he tells Impact Insider.
Cohen acknowledges that Page may have the law on his side. But that does not change how the situation felt inside the boardroom.
“Professor Page may technically be right. I’m not a lawyer. What I can tell you is what it felt like in the room at the time,” Cohen says.
“The board felt forced to sell. There was a very real fear that if board members rejected the offer, they could face legal consequences — including potentially being held personally liable for failing to fulfill their fiduciary responsibilities to shareholders.”
The Board Was Not as Robust as They Thought
Page is more willing to concede another central point in the assessment he and Katz previously presented: The armor around Ben & Jerry’s social mission was not quite as strong as they believed at the time.
When the company was sold, protection of the social mission was written into the acquisition agreement.
A permanent, self-perpetuating independent board was given primary responsibility for the social mission and the integrity of the brand, along with the power to enforce the agreement against Unilever.
Unilever also committed to continuing its support for the Ben & Jerry’s Foundation and preserving key elements of the company’s production and local roots.
In an article for Stanford Social Innovation Review, Page and Katz described the independent board as both independent and robust. Page now acknowledges that robust was too strong.
“We should have said independent and robust, albeit with inevitable weaknesses that I cannot predict now, but a team of highly trained lawyers will find them,” he says.
But the problem went beyond the weaknesses that lawyers might uncover. As Page and Katz observed in their article, those who control a company will usually be able to thwart its social mission.
“Unilever and now Magnum have deep pockets. The independent board and the foundation do not. Right now, it’s not a fair fight because the resources are so different,” Page says.
Had the Damage Already Been Done at the IPO?
The damage had been done long before the sale to Unilever, according to Bietz.
When Ben & Jerry’s went public, outside investors acquired ownership and voting rights. The IPO was intended to raise capital for growth.
That could provide more money for the social mission and give the company greater scope to influence the world. But it also embedded the logic of shareholder value in the company, Bietz argues.
“Ownership was gone. And it was already gone when they went public, in a way. So when Unilever came with its offer, it was too late,” he says.
Bietz points to another purpose-driven standard-bearer, Patagonia, which changed its ownership structure in 2022.
Read more: Interview: When Patagonia Gave Itself Away
For Bietz, the difference is striking. When Patagonia made its changes, founder Yvon Chouinard and his family still controlled the company. They were therefore free to decide where control should be placed in the future. Cohen and Greenfield did not have that freedom in 2000.
“That’s a big learning from all the many cases that we’ve dealt with: You cannot address these questions too early. The earlier, the better,” Bietz says.
Page is less categorical. He acknowledges that the IPO created a risk, but he does not believe it necessarily cost Ben & Jerry’s control. A company can be publicly listed and still preserve stable control through dual-class shares, a foundation or other legal mechanisms.
“There were certainly more things at the IPO that could have been done that would have made what happened in 2000 less likely to occur. But the IPO did not in itself have to lead to it,” he says.
Cohen now believes Bietz is asking the more fundamental question.
“Can a company go public, bring in outside shareholders, and still protect its heart and social mission for the long term?” he asks.
“At Ben & Jerry’s, we thought we had figured out a way to do that. We created super-voting shares that gave insiders majority voting power and were intended to protect the company’s independence and values. But when the Unilever offer came along, the lawyers told us that the super-voting shares could ultimately be revoked by a majority vote of the board.”
This may sound like legal hair-splitting — technicalities and fine distinctions.
But the disagreement matters because it changes the lesson of the story.
If Bietz is right, purpose-driven companies must confront the ownership question as soon as they invite their first outside investors in.
If Page is right, outside capital and a public listing are not necessarily the problem. It is possible to share economic rights without surrendering decisive control, for example through different share classes, a foundation or special veto rights.
They agree on one point: The structure must be established while the founders still have the freedom to do so — before competing interests begin to collide.
An Agreement That Actually Worked
Back in 2000, Cohen was far from convinced that the social mission was adequately protected.
“I was not confident at all. I was doing the best I could possibly do,” he told Impact Insider.
Even so, the structure held for more than 20 years.
“I was actually pleasantly surprised to see that for 20 years, Unilever kept their word and the social mission actually thrived under their ownership,” Cohen says.
Page considers that significant.
“That suggests he went in with his eyes open and his lawyers did a good job advising him of potential weaknesses in the agreement,” he says.
It is therefore too simplistic to call the entire structure a failure simply because it eventually broke down.
“For 20 years, that relationship seemed to work remarkably well,” Page says.
Under Unilever’s ownership, Ben & Jerry’s grew, continued to support social causes and spoke publicly about issues that most other companies avoided.
Whoever Controls the Company Decides
Despite their differences, Page and Bietz reach the same basic conclusion: When the parties no longer agree on the spirit of the agreement, formal control becomes decisive.
“You can try to tweak things around the edges, and you may even be successful for 20, 25 or 30 years. But ultimately, control really matters. If you want to keep a mission going, you need to make sure that people or an organization that support that mission continue to control your organization,” Page says.
Bietz puts it more succinctly:
“Ownership matters. If you really want to make sure that the mission always comes first, you need to address the ownership.”
That does not necessarily mean the founders themselves should retain control forever. In many cases, that would be impossible — and it could create a different problem, because founders can change their minds, lose their judgment or die.
The task is therefore to place control in a structure capable of surviving both a change of ownership and the founders themselves. That could be an enterprise foundation of the kind found in Denmark, a purpose trust, a structure like Patagonia’s or share classes that separate economic rights from voting power.
Such models can still allow investors to share in the company’s economic value creation without necessarily giving them the power to change its fundamental direction.
The price may be less access to capital or a lower sale price because investors do not receive full control. There is a trade-off.
“Put the controlling shares in a foundation. You will get less money for your shares, but your organization is going to be robustly run to advance the purposes that you set forth in the foundation you’ve created. So, yes, you will take less, but your organization will move forward,” Page says.
The Purpose Must Be Able to Evolve
Page also points out that legal drafting can eliminate every problem. A company’s purpose must be interpreted in situations that no one could foresee when the structure was created. A strong ownership structure is no insurance against disagreement.
The agreement around Ben & Jerry’s did not unravel over a routine dispute about donations or supplier terms, but over one of the world’s most contentious issues. The decision to halt Ben & Jerry’s sales in the occupied Palestinian territories triggered pressure that could significantly damage Unilever’s other business interests.
The example shows that even the most meticulously drafted legal agreement has limits. A purpose and its boundaries can be described with great precision, but reality can still develop in ways the agreement does not anticipate.
Rights Require Resources
The Ben & Jerry’s case also points to a more practical lesson. Rights matter only if someone has the means to enforce them.
If an independent board is to act as guardian of the purpose, it needs more than a clear mandate. It must also be able to appoint its own successors, set its own procedures, veto decisive transactions and go to court on the company’s behalf.
And it needs the money to do so.
Unilever and, later, Magnum have far greater legal and financial resources than the independent board and the Ben & Jerry’s Foundation.
An agreement like the one struck with Unilever should therefore set aside money for legal disputes and litigation, Page argues. A legal safeguard is of little value if the party it is meant to protect cannot afford to use it.
“With hindsight, I wish they’d put some funds into escrow to pay for legal expenses,” Page says.
A Future Ben & Jerry’s
Cohen is now working to persuade Magnum to sell Ben & Jerry’s to a group of investors who would restore the brand’s activist freedom. If he succeeds, the next question will be how to design the new structure.
Cohen has told Impact Insider that the group has spoken with the lawyer who advised Patagonia and with Purpose. He is no longer in doubt about the lesson he draws from the experience.
“If I could do it again, I would build the protection of the company’s mission into the ownership structure itself. I think a stewardship ownership model — something along the lines of what Novo Nordisk or Patagonia has done — would have been a smarter approach,” Cohen says.
“That’s what we plan to do when Ben & Jerry’s becomes owned by socially aligned investors.”
Page and Bietz both point out, however, that impact investors can also change strategy or come under pressure to produce higher returns.
“Even if it’s impact investors, they can change their minds at some point. When they have ultimate control, they’re the ones to decide the future direction of the company,” Bietz says.
There is probably no completely impenetrable defense around a company’s purpose. Laws can change, people can interpret the purpose differently, and any structure can be challenged in court. But some safeguards are stronger than others.
The central lesson from the fight over Ben & Jerry’s is that contracts, independent boards and purpose clauses cannot stand alone.
If the purpose is to outlive the founders, control must be placed with someone bound to uphold it.
The structure must be established while the founders still have the freedom to do so.
And the guardians of the purpose must be given both the rights and the financial resources needed to fight when the spirit of an agreement is no longer enough.
