Good morning from Canada, which today becomes the first country to legalize recreational marijuana.
The evolving role of the CEO was a big topic at Day Two of the Fortune Global Forum. Siemens CEO Joe Kaeser gave some of the most thoughtful comments on the subject. In a world of rising populism and nationalism, the German-based global conglomerate finds itself at the center of multiple conflicts—most recently the controversy over the apparent murder of Saudi journalist Jamal Khashoggi. Kaeser is scheduled to go next week to the Saudi investment forum, which many prominent U.S. CEOs and media organizations have now bailed on. He told me it’s “50-50” whether he would attend, and that he would make his decision in the next day or two.
“This is a very serious topic where you actually cannot win,” Kaeser said. “There is a person missing. There is a massive concern. On the other hand, if we skip communicating with countries where people are missing, I just can stay home because I cannot talk to anybody anymore.”
Kaeser also called growing inequality driven by technology “the single biggest challenge we face today…Connectivity opens transparency, and that could actually lead us to a further divide in society. By nature, [the Internet] is binary, by nature it divides the world into winners and losers. We need to be very mindful of how to reduce the societal divide.”
The Siemens chief urged fellow CEOs to take the lead in addressing the problem, and not wait for government. “Do politics help us? Absolutely not,” he said. “The whole geopolitical environment goes into…what’s in it for me? And don’t care about the others.”
Qualcomm CEO Steve Mollenkopf also spoke on the role of transparency in changing the CEO’s role. “I think the mechanisms by which people can comment on what you’re doing [as CEO] is a really fundamental change…Being a CEO today is more like running for office.”
“The world is asking us, our employees are asking us, and governments require that we have a point of view,” agreed ex-Xerox CEO Ursula Burns. “And, we have good points of view, we are smart people. We have been all over the world.”
Also on the Forum stage yesterday was Canadian Foreign Minister Chrystia Freeland, who caused a stir earlier this year by speaking out against Saudi treatment of women’s rights activists—at a time when other leaders were stilling wooing the crown prince.
“Canada believes it is important to speak about human rights in the world,” Freeland said. “It’s important to do so politely and with humility. We make no apologies.”
And here’s the amazing business fact for the day: Starbucks CEO Kevin Johnson told the group his company is opening a new store in China every 15 hours.
More news below. If you regret missing this year’s Global Forum, some good news: we announced yesterday that next year’s Forum will be in Paris, at the invitation of President Macron. Dates and details to come.
More news from the forum here, and other news below.
Trump Fed Up
Think Robert Mueller presents the most peril for President Trump? Trump says otherwise, citing instead the Federal Reserve and its rate hikes as his “biggest threat.” The president: “It’s independent so I don’t speak to [Fed Chair Jerome Powell], but I’m not happy with what he’s doing, because it’s going too fast…I put him there, and maybe it’s right, maybe it’s wrong…I put a couple of other people there that I’m not so happy with too. For the most part, I’m very happy with people.” Wall Street Journal
Google has revealed the measures it will take to comply with the European Commission’s antitrust decision over its Android operating system (a decision that also involved a $5 billion fine, against which Google is appealing.) Google will now allow manufacturers to make phones that use non-Google versions of the operating system, even if they also make phones with Google’s Android apps on them. Manufacturers will also be able to license Google’s app suite without having to preinstall Google Search or the Chrome browser. Google
Remember a couple years back when Facebook admitted to artificially inflating its metrics for video viewing times? Well, the small advertisers that subsequently sued the social network have now claimed that Facebook knew about its calculation problem more than a year and a half earlier, and did nothing since higher figures would mislead advertisers into thinking Facebook was a hotter video platform than it actually was. Fortune
When VW’s CEO warned about stricter emissions controls posing a threat to the German auto industry, he wasn’t kidding. Turns out that passenger car registrations in Europe were down 23% last month, after new emission rules came into effect. August had seen a bump in registrations, due to manufacturers hurrying to sell inventory before the new regulations hit. Bloomberg
Around the Water Cooler
The U.S. is the world’s most competitive nation, according to a new World Economic Forum report. This is the first time the country topped the rankings since the financial crisis. The other inhabitants of the top five are Singapore, Germany, Switzerland and Japan. Fortune
Tesla has bought a plot of land on the outskirts of Shanghai for its new Chinese factory, which will allow it to lower costs for the cars it sells in the country. The factory should be pumping out cars in a few years’ time, with initial capacity for 250,000 cars and battery packs each year. CNBC
Former Facebook security chief Alex Stamos is setting up a new initiative called the Stanford Internet Observatory, which aims to help academia, tech giants and policymakers cooperate in tacking “the negative impacts technology can have on society.” A big concern of his is the spread of “hack and leak” tactics. Washington Post
President Trump says he doesn’t want to support sanctions against Saudi Arabia because the U.S. is making a lot of money off arms sales that might otherwise go to the Chinese. But is that true? Not according to analysts, who point out that Beijing’s arms exports to the kingdom are tiny in comparison to American exports. Researcher Simone van Nieuwenhuizen: “While its technology is developing, China still lags behind the US in the sophistication and capability of its military equipment. It simply can’t fill the gap.” South China Morning Post