A bit of good news this Friday morning.
CEO Daily has written extensively in recent years about the trust crisis—a growing public sense, exacerbated by the financial crisis, that business is not adequately serving the needs of society.
There’s new evidence out this morning from our friends at JUST Capital–provided exclusively to Fortune–that the crisis may be receding. At least a bit. Working with NORC at the University of Chicago, JUST Capital polled some 9,000 people this year—across age, region and demographic groups, and by both phone and online—on their views of businesses. Key takeaways:
– The public’s negative impression of business has softened. Only 38% of respondents think the behavior of American companies is moving “in the wrong direction,” down noticeably from 47% in 2017; while 30% think it’s moving “in the right direction,” compared to 27% last year.
– More people see companies prioritizing workers on par with shareholders. To be sure, a full 59% still believe shareholders are “the top priority,” and only 20% believe workers are “the top priority.” But that’s a significant change from 2017, when 69% said shareholders were top priority, and only 9% said workers.
Needless to say, negative impressions of business still outweigh positive, and shareholders are still perceived as getting a higher priority than workers. But this is the strongest evidence I’ve seen to date that things are inching in the right direction. It also suggests that the recent trend in CEO behavior—with a steadily growing group of CEOs consciously working to maximize their company’s positive influence on society—is having an impact. CEOs speaking out on important social issues—a related trend that’s accelerated in the last few years—may also be making a difference. The poll showed that 63% of Americans think CEOs of large corporations “have a responsibility to take a stand on important social issues.”
JUST Capital, which was founded by hedge fund manager Paul Tudor Jones, uses this polling data to guide its annual index of companies, rating them on how well they meet the public’s expectations. From the data, it’s clear that how a company treats its own employees and contractors is at the top of the public’s list of concerns. But how it treats its customers, the value of its products, and its impact on the community and the environment also come into play.
There won’t be any more talks with China until the country presents a plan for addressing U.S. concerns over economic issues such as forced technology transfers, according to officials. Presidents Trump and Xi are due to meet at a G20 summit in late November. An unnamed White House official told the Wall Street Journal: “If China wants [the session] to be a meaningful meeting, we need to do the groundwork. And if they don’t give us any information, it’s just hard to see how that becomes fruitful.” WSJ
Amazon beat analyst estimates with its third-quarter earnings, but Wall Street didn’t like its revenues nor its forecast of a slight deceleration in growth, particularly during the all-important holiday season, so the company’s share price fell 9% in afterhours trading. CNBC
Twitter’s losing users, but those who haven’t left are using the platform more, which means Twitter gets to make more money on ads, which is why Twitter’s share price popped 15% yesterday. Fortune
Google’s leadership is trying to mollify staffers following the revelation that the company paid big bucks to former Android chief Andy Rubin upon his departure, despite serious allegations of sexual misconduct. CEO Sundar Pichai and HR chief Eileen Naughton wrote to staff that 48 people have been terminated for sexual harassment in the last two years, and none got an exit package. Rubin denies the claims about his behavior. Bloomberg
Around the Water Cooler
New figures from the EU show that women in the bloc still earn 16.2% less than men do, on average. The situation worsens after retirement, when a gender pension gap of 36.6% manifests. Factors range from the corporate glass ceiling to the fact that women more often work part-time, and more often work in lower paid sectors. The European Commission has proposed a new law to improve the work-life balance, mandating more paid parental leave for new fathers. Guardian
Marlboro maker Altria is axing a fifth of its vaping line-up, in order to address concerns by regulators that flavored vaping products attract kids to take up the practice. Altria will remove its MarkTen Elite and Apex by MarkTen pod-based products from the market, and only sell tobacco, menthol and mint flavors for its other vaping devices. BBC
China and Japan
China’s talks with the U.S. may not be going anywhere, but the country just signed more than 500 business deals with Japan, including the revival of a big currency-swap agreement that’s been on ice for the last five years. Chinese Premier Li Keqiang said he and Japanese Prime Minister Shinzo Abe “both feel that it is in our mutual interest to maintain a long-term stable China-Japan relationship, which is also beneficial to the stability of the region.” South China Morning Post
Shareholders vs Employees
The real threat to U.S. jobs comes from shareholders rather than immigrants or robots, according to Transform Finance co-founder Andrea Armeni and Center for Sustainable Business director Tensie Whelan. They write for Fortune: “Under shareholder capitalism, the U.S. labor force has become a liability…To help American workers and shareholders, we suggest asset managers and owners move to reject shareholder primacy and embrace stakeholder capitalism, invest in positive approaches to quality employment, and help workers regain a voice in corporate decision-making.” Fortune