Magnum Audit Flags Governance Issues at Ben & Jerry’s Foundation Ahead of Spin-Off

An internal audit by Magnum, the soon-to-be-spun-off Unilever unit that will oversee Ben & Jerry’s, has identified significant gaps in financial controls, governance, and compliance at the Ben & Jerry’s Foundation, the ice-cream brand’s independently run charitable arm. According to Magnum, the review was conducted as part of routine governance in preparation for the company’s public listing, and findings were shared with the foundation along with recommendations to strengthen oversight through a code of ethics, conflict-of-interest rules, trustee term limits, and more rigorous grant-management procedures.

Sources familiar with the matter said trustees recently signed a new ethics code and stressed that the audit did not uncover wrongdoing or ethical violations. Still, Magnum reported that several deficiencies remain unresolved. Unilever echoed Magnum’s statement, saying the company is taking “appropriate steps” to address the issues. Earlier this year, Unilever threatened to suspend the approximately $5 million in annual funding the foundation receives unless an audit was completed. Magnum has stated it intends to continue funding the organization if corrective steps are taken.

The audit comes amid a long-running dispute between Unilever and Ben & Jerry’s tied to the brand’s outspoken political positions, including criticism of U.S. policies and opposition to Israel’s actions in Gaza and the occupied West Bank. Ben & Jerry’s secured unique autonomy when it merged with Unilever in 2000, including an independent board and the preservation of its foundation. Tensions escalated in 2021 when the brand halted sales in the West Bank, sparking backlash from pro-Israel investors and financial repercussions for Unilever.

As Magnum prepares for its spin-off, the company warned in its draft prospectus that Ben & Jerry’s activism could expose the new entity to reputational risks and potential boycotts. Co-founder Jerry Greenfield is expected to step down as a foundation trustee, while fellow co-founder Ben Cohen has suggested conflicts with Magnum may intensify post-listing. Despite his efforts to buy back the brand, Magnum has stated it is not for sale.