Date: 2024-07-26 Page is: DBtxt003.php txt00016582
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BRANDS TAKING STANDS™ NEWSLETTER
I thought this was going to be a bigger story ... bottom line, one or two remarks have been made, but it is nothing like a tidal wave of rethinking.
Peter Burgess
Continue the important conversations on corporate responsibility long after 3BL Forum with the Brands Taking Stands™ newsletter. Written by veteran journalist, John Howell, this newsletter is published every Wednesday morning.
THE BIG STORY
CEOs Call for Capitalism Reform to Deal with Income Inequality
Among the ranks of top CEOs, alarm is spreading about the threat that rising income inequality could present to the future of capitalism. The concerns are being driven by a number of factors, from the unaddressed aftermath of the 2008 crash to the recent tax cuts which boosted corporate profits over benefits to Main Street taxpayers.
One strong source of the public push is, of course, the 2020 election cycle with its heated rhetoric that regularly includes attacks on corporations as greedy and executives as overpaid. Income inequality is being called “a national emergency” and a “threat to global stability.” The growth of political populism, an increasingly favorable view of socialism among younger generations, and widespread negative attitudes toward multinationals are also elevating the alarms in board rooms to code red.
Unsurprisingly, the issue is becoming a top item on many corporate agendas, included under “risk” in company filings.
Blackstone CEO and Chairman Steve Schwarzman is the latest corporate titan to go public with his thoughts on the need for a course correction for capitalism. “I look at this as a systemic problem,” he told CNBC. “Half of our society is severely disadvantaged. We can’t allow that to continue, so that means you need policy solutions.” Schwarzman’s call to action follows similar comments made by JPMorgan Chase Chairman and CEO Jamie Dimon and Bridgewater Co-Chief Investment Officer and Co-Chairman Ray Dalio.
Chubb Chief Executive Evan Greenberg is one of an increasing number of CEOs addressing income inequality in annual company reports. Globalization and technological change have “led to increased stress and declining living standards for many and created enormous wealth for a few,” he writes.
The bottom line: look for more CEOs to commit their companies to take stands on income inequality in the absence of meaningful governmental initiatives.
CASE STUDY
Humana’s “Stand” on Health Care Policy
One of the keys to taking an effective stand on a controversial issue is aligning that position with the company’s capabilities and mission. This can be especially tricky in the case of a legacy company with long-established strategies and practices. Asked about Humana’s stance on the “Medicare for All” idea that is being championed by some presidential candidates, CEO Bruce Broussard countered the prevailing argument among most in the health insurance industry. Rather than believing it poses an existential threat to the sector, Broussard believes that Medicare for All could be a “great opportunity for the industry to expand the population that it’s coordinating with.” Speaking at Barclay’s Global Healthcare Conference, he said, “the effectiveness of a Medicare for All program in large part would depend on its structure and would have to focus on consumer choice, population health and managed care, which would align with both Humana’s capabilities and the direction of the industry,” according to Insider Louisville. He added the obvious caveat that how a Medicare for All program would work and who would pay for it are big questions that yet have no definitive answers. Broussard’s insights are a reminder that creative disruption which threatens business-as-usual can be a spur to innovative thinking rather than a knee-jerk defense of the status quo.
NEWS YOU CAN USE
Social Justice
Ben & Jerry’s is calling on lawmakers to pass legislation that would expunge all cannabis convictions from legal records, saying that “legalization without justice is half baked.” It is also asking for “pardons and/or amnesty” for anyone whose sole crime was possession of cannabis. In an announcement released on 4/20, a day commonly celebrated by cannabis enthusiasts, the company pointed out that “a disproportionate number of people getting arrested for using cannabis are black.” Disparities in arrests and subsequent criminal records between black and white cannabis users have been noted for years. Now, with marijuana decriminalization spreading and business booming, that discrepancy has widened to include those profiting from the industry. The company’s statement pointedly referred to the statistic that 81% of cannabis executives were white: “We love 4/20 and we love legalization, but that’s not OK.” A petition on Ben & Jerry’s website has recorded over 33,000 signatures to date.
The Environment
Polo Ralph Lauren has launched Earth Polo, a variation on its classic polo shirt made of recycled plastic bottles and dyed through a manufacturing process that uses no water. They are produced in partnership with First Mile, an organization that collects bottles to be turned into yarn and, ultimately, fabric, according to the Associated Press. David Lauren, the youngest son of the company’s founder and its Chief Innovation Officer, told AP that the new shirt is part of a broader strategy of fresh environmental goals throughout the manufacturing process. “Every day we’re learning about what’s happened with global warming and what’s happening all around the world, and our employees and our customers are really feeling that it’s time to step up and make a difference,” said Lauren. Many smaller clothing brands use recycled materials but the commitment by a global giant such as Polo Ralph Lauren (2018 gross revenue: $6.182 billion) pushes the concept to a new, much higher level of impact.
Diversity
In a proxy filing, General Motors says that its board will become female-majority later this year, following the retirement of two longtime male directors. Six women, including Chief Executive Officer Mary Barra, and five men make up the slate of members up for shareholders’ approval at the company’s annual meeting in June, reports Bloomberg. Barra and incoming Best Buy CEO Corie Barry could become the only female CEOs in the S&P 500 who serve a board with a majority of women directors. Two other companies with a majority of female directors, Viacom and CBS, have male CEOs. Investors, shareholders, and quotas mandated by state governments are driving change in big companies at the board level.
C-SUITE COMMENTS “God didn’t invent the corporation. The corporation was invented by society … and that means that the corporation has an obligation to society.”
— Lady Lynne Forester de Rothschild, founder and CEO of Coalition for Inclusive Capitalism Excerpted from Fast Company
JPMorgan Chase has promoted two women to top management roles. Marianne Lake, currently CFO, has been named Chief Executive of Consumer Lending. Jennifer Piepszak, currently Chief Executive Officer of Card Services, will become CFO and join the bank’s Operating Committee, the bank’s internal governing unit; Ms. Lake is already a member.
Lillian Dukes has been elected President of the Board of Directors of Fondation Enfant Jesus-USA. Dukes is principal and president of her own firm, LAD Consulting. FEJ is a successful charitable group based in Haiti which has worked for more than three decades to help break the cycle of poverty there, empowering local communities, and providing genuine care for Haiti’s most vulnerable populations, children and families.
Dan York has joined RES, the environmental solutions provider, as Director of California Development. York previously led The Wildlands Conservancy, most recently serving as VP.
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Want to receive this newsletter by email? - John Howell, Chief of Thought Leadership and Editorial Director, 3BL Media Lynne Filderman, Executive Producer lfilderman@3blmedia.com 866.508.0993 x129 ©2019 3BL Forum WEBSITE BY CORPORATE COMMUNICATIONS, INC.