Good morning.
Warren Buffett held his annual investor-fest this weekend, and weighed in on a bunch of things, including CEOs taking stands on hot button social issues. While he certainly airs his own political views from time to time, “I don’t speak for Berkshire in doing that,” he told CNBC. “I don’t believe in imposing my views on 370,000 employees and a million shareholders. I’m not their nanny. You have to be pretty careful…in terms of social issues.”
A decade ago, Buffett’s view on this subject was standard CEO fare. But in the last couple of years, a surge of CEOs have taken strong stands on behalf of their companies on social issues: think Salesforce CEO Marc Benioff’s campaign against Indiana’s religious freedom law; Bank of America’s opposition to North Carolina’s restrictions on transgender access to public bathrooms; Merck CEO Ken Frazier’s resignation from President Trump’s advisory council after the Charlottesville riots; and Delta CEO Ed Bastian’s decision to cut discounts for NRA members after the Parkland shootings—to name just a few.
None of those would have happened a decade ago. So why are they happening now? I gave my views on how business leadership is changing in CEO Daily’s sibling newsletter, Data Sheet, while guest-posting last week. (You can read it here.) In many cases, their employees and customers are demanding they speak out.
But Buffett is right in noting that this gets tricky quickly. When Frazier made his stand, he was not giving his personal views, but signaling “what kind of company we are.” Benioff and Bastian were doing the same. At some point, taking such stands on issues that aren’t core to the company’s business risks alienating customers and shareholders, and adding to political polarization. The old line separating business issues from political and social issues has clearly moved. But many CEOs I talk to are still struggling to understand where the new line should be drawn.
More from Buffett-palooza here, including his explanation of why he won’t buy Microsoft stock, and his spat with Elon Musk over the candy business. Other news below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
Nestle and Starbucks
Nestle is going to start selling Starbucks coffee around the world, and will pay the U.S. chain $7.15 billion for the privilege. The Swiss firm appears to have struck the Starbucks deal in order to fortify its leading position in the international coffee market. Starbucks says it will use the cash to speed up share buybacks. The products will be distributed using Nestle's network, but Nestle's name won't be on the packaging. Reuters
Air France Turmoil
Air France-KLM CEO Jean-Marc Janaillac suddenly stepped down Friday, and the carrier's shares tumbled by as much as 13% as a result. Janaillac left due to big strikes that are still ongoing, and have led French economy minister Bruno Le Maire to warn that Air France may "disappear" as a result. However, the turmoil must be seen in the context of wider outrage over President Emmanuel Macron's push to "modernize" French labor. Fortune
Mondelez Buys Tate's
Mondelez, the snack-food giant that resulted from Kraft Foods' slimming-down several years ago, is to pay $500 million for the choc-chip-cookie-maker Tate's Bake Shop. This is the first big deal for new-ish CEO Dirk Van de Put, who said in a release: "Tate's has demonstrated exceptional and very profitable growth, and we look forward to working with the Tate's management team to expand distribution and build upon that success." Wall Street Journal
Avengers Triumph
Disney's Avengers: Infinity War took 11 days to clear $1 billion in box-office takings—a new record. Star Wars: The Force Awakens (also Disney, of course), set the previous record with 12 days. Infinity War has now taken $1.16 billion, and it hasn't even opened in China yet. CNBC
Around the Water Cooler
Russian Protests
Vladimir Putin's inauguration today was preceded by massive protests on the weekend, largely organized by arch-nemesis Alexei Navalny, who was not allowed to stand against Putin. According to independent monitors, 1,600 people were arrested in 27 cities, and more than 100 remained in custody on Sunday. "As Putin prepares to start his fifth term, it turns out that there are many who are not prepared to become zombies or turn into serfs of a self-proclaimed tsar," said Navalny. Financial Times
Californian Solar
The Californian Energy Commission will vote Wednesday on whether to mandate the installation of solar panels on all new homes, condos and apartment buildings of up to three stories. The mandate would be the first at the state level in the U.S., although some more local initiatives are already underway—San Francisco, for example, already requires new builds under 10 stories to come with solar panels. Fortune
Hybrid Debate
Reports in the U.K. have suggested that the government there is planning to crack down on hybrid vehicles that can't go at least 50 miles on electric power alone, by 2040. The move would whack cars such as the popular Toyota Prius, and the Society of Motor Manufacturers and Traders has slammed the government's "unrealistic targets and misleading messages on bans." But the transport ministry has denied planning a ban. BBC
Cape Town Water
There's recently been a flood of articles (pardon the pun) about how Cape Town, South Africa, "beat the drought" or has been "saved from running out of water" through water-saving measures. This one, from NBC, is impressively nuanced, noting how "Day Zero"—when the taps run dry—has only been averted for now. As a native Capetonian, I'd urge you to remember that everything depends on the levels of rainfall during the winter that is now approaching; they need to be impressive to pull the city back from the brink, and we'll only know later this year how far Day Zero has been staved off. NBC
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
