Greetings from snow-buried Greenwich, which makes Davos look relatively barren. A final note from the World Economic Forum:
CEOs don’t come to this Swiss village to “improve the state of the world” – as the forum’s motto suggests. They come mostly because it’s an efficient place to do business. In three days’ time, you can arrange scores of meetings with partners, customers and government officials that otherwise might have taken weeks of travel.
But having so many CEOs in one place creates the opportunity for some interesting and even important conversations. On Friday evening, FORTUNE assembled nearly 30 corporate leaders for a discussion that focused on what big business can do to rebuild its trust with a global public that has clearly grown skeptical. Seated around the table were the CEOs, presidents and founders of companies that span the globe and employ nearly three million people, including Deloitte, RBC, General Motors, Santander, Alcoa, Alibaba, Bank of America, McKinsey, Salesforce, Flex, Cisco, eBay, Kaiser Permanente, Nestle, Monsanto, Huawei, Facebook, Bain, AirBNB, Virgin, MassMutual, SC Johnson, and Heidrick and Struggles.
The single table conversation covered the need to put purpose as well as profit at the center of a company’s strategy; the importance of transparency in an age of social media; the value of engaged employees in spreading a company’s story; and the need to build customer trust one person at a time. The comments were off the record, so I can’t report them in detail. But I can say the thoughtful conversation left me feeling more hopeful about the future than anything I’ve heard from Iowa or New Hampshire in recent weeks. The focus of business leadership has changed in the last decade, and even if that’s out of necessity, it’s a good thing.
Global stock markets are less cheery than I am this morning, and have resumed their slide after a brief Asian rally. Other news below, including Tyco’s merger, Twitter’s talent purge and Theranos’ continuing troubles.
Take time today to read Jennifer Reingold’s fascinating story about the Italian billionaire who has taken control of Walgreens and is now squaring off with CVS for drugstore domination. It’s in our February magazine, but available online today.
• Johnson Controls, Tyco in merger talks
Merger rumors began to swirl over the weekend for a major deal that would combine Johnson Controls and Tyco International in a deal valued between $15 billion to $20 billion. The Wall Street Journal reported on the deal first, which was confirmed by Johnson Controls just as we were preparing to send out the CEO Daily newsletter. The press statement can be found here. Both companies have seen their stock fall over the past year. For Johnson Controls, shares are down 25% over the past year amid worries about future growth. It manufactures batteries and heating and ventilation equipment, while Tyco is a security systems company.
• Dorsey overhauls Twitter leadership
Jack Dorsey has moved to shake up the social-media company’s leadership in a bid to reverse the ailing fortunes of a company that has lost the faith of Wall Street and become the subject of speculation that it is a takeover target. On Sunday, he confirmed the departures of four top executives – of course via a tweet. Those exiting included Alex Roetter, Twitter’s head of engineering, and head of product Kevin Weil. “I’m personally grateful to each of them for everything they’ve contributed to Twitter,” Dorsey wrote in a tweet.
• Problems found at Theranos lab
The Wall Street Journal has reported U.S. health inspectors found deficiencies at Theranos Inc.’s laboratory in Northern California, problems that are so serious that a failing to fix them could put the company’s lab at risk of suspension from the Medicare program. While it isn’t clear what regulators have faulted Theranos for in their latest inspection, it comes as another setback for the high-valued startup, worth about $9 billion in 2014. Last year, it was reported Theranos stopped collecting tiny samples of blood from patients’ fingers for all but one of its tests while waiting for approval from the Food and Drug Administration.
Wall Street Journal (subscription required)
• Oil prices slide again
A short-lived crude rally that lasted a single day last week has failed to gain momentum to start the new week, as oil bears were back out in force after Iraq said oil output had reached a record high in December, adding to an already oversupplied global market. Meanwhile, the chairman of the Saudi state-owned oil giant that produces nearly 10% of world output said it hadn’t reduced investment despite a collapse in prices.
Around the Water Cooler
• U.S. IPO market’s slow start for 2016
The initial public market is on track to record the slowest month since the recession in January, with zero new companies having started trading on U.S. exchanges so far in 2016. If no firm IPOs before the end of the month, it would be the slowest period for IPOs since December 2008, when no companies filed after the bankruptcy of Lehman Brothers. A year ago, 19 companies listed on American exchanges in January 2015. Stock volatility is mostly to blame and observers say an eventual recovery could take a matter of months.
• Corporate wellness program spat brews
While most large employers offer wellness programs, companies and workers alike may find the rules difficult to navigate. The New York Times points out that workers are increasingly being told by companies to enroll in wellness programs and undergo health screenings – or face stiff financial penalties, often in the form of higher premiums. There is also a standoff brewing: the federal Equal Employment Opportunity Commission has pursued legal action against the corporate programs.
New York Times (subscription required)
• The under-the-radar political ad war
While television advertisements generate much of the media buzz during presidential campaigns, a less expensive alternative – radio ads – allow candidates to reach very specific audiences with messages that can be more pointed and often times more controversial. For example, Republican frontrunner Donald Trump’s new radio ad features Jerry Falwell Jr., the evangelical president of Liberty University, hinting at a possible endorsement. And because it airs on Christian radio stations, it is highly targeted.