Good morning.
It’s become fashionable to be cynical about companies claiming to do good in the world. My colleague Adam Lashinsky provided a demonstration yesterday in this post on Data Sheet, in which he suggested most business leaders merely ‘pay lip service’ to the desire to change the world. He touted author Anand Giridharadas, who is building a career off attacking corporate do-goodism.
But speaking at the Fortune CEO Initiative last night, IBM CEO Ginni Rometty offered a clear rejoinder to the cynics. She talked about the decision her company made seven years ago to start an effort to train disadvantaged youth for technology jobs, called P-Tech. It wasn’t charity or even corporate responsibility that drove IBM to do it, she said. Instead it was a realization that the company needed an influx of new tech talent to manage the rapid changes ahead. Since then, P-tech has served 125,000 students through 200 schools in 14 countries. Rometty says some 500 other companies have now joined IBM in the effort. It‘s not just because they have a heart; it’s because they have a clear-eyed focus on the long term interest of their companies. In the long term, corporate interest and societal interest tend to converge.
Brad Smith, the president of Microsoft, made a similar point earlier in the day, explaining why his company had devoted company funds to combatting housing issues. “You can’t have a healthy company if you don’t have a healthy community,” he said. It’s not just doing good; it’s good business.
Speaking of community, Adam will be interviewing Raghuram Rajan at the CEO Initiative first thing tomorrow morning. Rajan is the former chief economist of the IMF who argues community is The Third Pillar (the title of his book) that has been forgotten in the political struggle between the state and the marketplace. A stronger sense of community, he argues, is key to restoring sanity to our society.
More from the Initiative tomorrow. Other news below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
Amazon Brand
Amazon is now the world's most valuable brand at $315.5 billion, which is up more than half on a year ago, according to Kantar's BrandZ Top 100. This is the first time in a dozen years that the top spot has not been occupied by Apple or Google. Here's Kantar's Doreen Wang, giving CNBC a masterclass in marketing-speak: "The boundaries are blurring as technology fluency allow brands, such as Amazon, Google and Alibaba, to offer a range of services across multiple consumer touchpoints." CNBC
Photo Merger
Apollo Global Management is buying the online photo-product retailer Shutterfly at a valuation of around $1.74 billion. Apollo intends to merge Shutterfly with Snapfish, a rival. Apollo senior partner David Sambur: "We look forward to working with Shutterfly’s talented employees and supporting further investments in technology to drive the continued growth and success of the business." Wall Street Journal
Insurer Scandal
Two executives at the insurer Tokio Marine Kiln have resigned following sexual harassment claims that included groping a colleague at a party and stalking a direct report. The resignations followed a Bloomberg Businessweek report into endemic sexual misconduct at the Lloyd's of London insurance market. Bloomberg
Fiat Renault
French officials hope the moribund merger of Fiat Chrysler and Renault can be brought back from the dead. Transport Minister Elisabeth Borne said she believed talks were not closed, and Finance Minister Bruno Le Maire said the merger was still a "good opportunity." Reuters
Around the Water Cooler
'Trump Recession'
Consumer Technology Association chief Gary Shapiro has warned that the imposition of heavy new tariffs on Chinese imports could push the U.S. into a "Trump recession." Shapiro: "They are taxes, they hurt consumers, they hurt American companies." CNBC
Hipster Antitrust
Microsoft president Brad Smith, who was the company's general counsel during its antitrust wars in the 1990s, reckons changes are coming to antitrust enforcement as regulators find new ways to evaluate the behavior of tech giants. Smith concurred with the analysis of Fortune's Adam Lashinsky that the U.S. government is about to hew to "hipster antitrust" standards that are based on socioeconomic issues rather than pricing alone. Smith: "Apple-Spotify will be first real case on how operating systems use app stores." Fortune
Dirty Money
The European Banking Authority does not have the power to stop a wave of money-laundering across the EU, the regulator's head has said. José Manuel Campa told the Financial Times: "There have been cases of money laundering in Europe, yes, in some cases pretty sizeable ones. I’m not saying we have a good system. [But]I don’t think the mandate that the EBA has received is the mandate that will solve that problem. It is not a mandate to harmonize [anti-money laundering,] either regulation or practices, across the union. Because to start that process you first need legislation." FT
A.I. Challenges
Executives gathered at Fortune CEO Initiative in New York City yesterday agreed that deployment of artificial intelligence is a must-have, but one with major challenges. McKinsey senior partner Daniel Pacthod: "The biggest hurdle is talent and the skill of the leadership team. It has to be a top-three CEO topic. The CEO then has to say, ‘I have to retrain my leadership team, not only at the analytics level but from top to bottom.’" Fortune
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
