SWITZERLAND - Peter Brabeck-Letmathe, chairman and chief executive of Nestlé, has acknowledged pension funds' role as primary stakeholders in the food group.

The comments come just over a year after the company defeated a corporate governance motion brought against it by a group of Swiss pension funds. The company had accused the pension funds of "mistrust".

"Let me say first of all that our primary responsibility is to our shareholders - those hundreds of thousands of people who have entrusted their life savings to us - either as individual shareholders, or as members of institutional pension funds that own the majority of our stock," Brabeck-Letmathe said.

"Should we fail as a business, it is their retirement savings which are destroyed, so they're the primary stakeholders of our company," he said in a presentation on shareholder value and corporate responsibility at the London Business School last month - which has just been released.

Brabeck-Letmathe said that long-term shareholder value had to be based on the long-term trust of the public. 

"And in order to create that trust, it is necessary to build corporate social responsibility into the company strategy, and follow that strategy over a very long period of time."

Nestlé shareholders at the company's annual general meeting in Lausanne last year rejected a proposal by the Ethos group, which represents Swiss pension funds, to prevent chief executive Brabeck-Letmathe taking on the extra role of chairman.

Earlier Gut, the former head of Credit Suisse, had rounded on the schemes funds for their "mistrust".

"I am somewhat disappointed that several public pension funds have chosen to follow the precepts of a fund that specialises in sustainable investments," he told the meeting.

"I do not believe that the work of the board of directors of Nestlé deserves such mistrust and I must wonder about the true motives that led to the proposals," Gut said.