CEO Daily: Thursday, August 20
This morning, Fortune unveils its first ever Change the World list – 51 companies that have made serious progress addressing the world’s biggest social and environmental problems as a core part of their corporate strategy.
Our purpose in doing this is to demonstrate the extraordinary power of capitalism to do good. We live at a time when criticism of corporations is on the rise. You could hear it in Pope Francis’ criticism of the global economic system in Bolivia, and see it in the crowds Bernie Sanders draws in New Hampshire. And to be sure, corporations have provided plenty of fuel for that criticism.
But something new is afoot. Partly in response to public pressure, an ever-growing number of companies are making conscious efforts to harness their profit-making creativity to directly address the globe’s most intractable problems.
We think you will find the stories here inspiring: How Vodafone and Safaricom have connected 17 million people in the poorest regions of the world to the financial system; how GSK have developed and marketed an inexpensive vaccine that could prevent the killer malaria in untold numbers of children; how Jain irrigation has transformed the lives of 5 million small farmers in India. In each case, the companies are profiting as a result. That doesn’t diminish their efforts; rather, it assures they will be sustained.
At a time when governments around the world – and particularly in the U.S. – seem so often stymied, putting the power of profit to work in addressing critical social problems is more important than ever. We think this list highlights capitalism at its best. And we plan to make it an annual event.
Enjoy the day, and change the world!
• California broadens Uber lawsuit
State prosecutors are now alleging ride-sharing service Uber's background checks missed people previously convicted of murder and sex crimes. The district attorneys of San Francisco and Los Angeles filed an amended complaint this week against Uber, saying registered sex offenders, a kidnapper and a convicted murderer were among the individuals that had passed the company's screening process and were driving for the company until cited for providing illegal rides. Reuters
• 'Female Viagra' maker may get sold
Mergers and acquisitions have been a popular trend in the pharmaceutical industry. They are also occurring at almost record speed. Just yesterday, we mentioned in CEO Daily that the first drug to treat a lack of female sexual desire won Food and Drug Administration approval. Today, word on the street is Valeant Pharmaceuticals is nearing a deal to pay $1 billion for Sprout Pharmaceuticals, the company that made the treatment, which will be marketed under the brand name Addyi. WSJ (subscription required)
• Oil drilling auction interest dries up
For the first time since the recession, oil prices are approaching the $40-a-barrel level. As a reminder, last summer the commodity was above $100 a barrel. With that slump in mind, and oil firms drastically scaling back on capital spending, it makes sense that a federal auction in the Gulf of Mexico attracted the lowest interest from producers since 1986. The auction for drilling leases pulled in just $22.7 million in bids from five companies. New York Times (subscription required)
• Intel bets on Internet of Things
We've written a lot about the trend of tech firms calling much of their new innovation a play for the Internet of Things – efforts to connect coffee makers, smoke detectors and factories online. Intel executives this week touted their IoT potential, trying to hype their efforts in a space where they aren't exactly a clear winner. Well as the phrase becomes more heavily used by marketers (and thus diluted and potentially overhyped), Intel could benefit as the chip industry aims to help tech companies power their connected devices. Fortune
Around the Water Cooler
• Trump phenomenon resembles a bubble
The poll numbers don't lie: businessman Donald Trump remains the frontrunner for the Republican presidential nomination, no matter how many times TV pundits and political professionals have been dismissive of his campaign. Fortune's Shawn Tully notes that his run could resemble a stock market craze, and you never know how long a bubble will last; only that it will eventually pop. Tully does the math and figures that if Trump were a stock, he would be really expensive. Fortune
• GE helps Immelt amass $22M benefit
General Electric has helped CEO Jeffrey Immelt build up $22 million of life insurance coverage that one day could help his heirs cover the tax bill for his estate, Bloomberg reports. GE spent $314,511 last year for Immelt's two life insurance plans. In comparison, JPMorgan Chase and Apple spent $101 and $2,520, respectively, on policies for their CEOs. Life insurance expenses don't get a lot of attention, and some argue that should change. "I don't think it's on the radar for shareholders in the way it should be," said one corporate governance director. Bloomberg
• Tech workers: Richer, but less happy
The tech industry gets a lot of press for workplace perks such as free snacks and lunches, fitness classes, sleeping pods at the office and most importantly, a high salary. But one Seattle startup conducted a survey of engineers and developers and found that tech workers are less happy than the workers in other sectors in every key category. "There's widespread workplace dissatisfaction in the tech space, and it's undermining the happiness and engagement of these employees," the survey concluded. USA Today