Google Suit, Olympus Activists, Huawei Arrest: CEO Daily for January 11, 2019

January 11, 2019, 10:55 AM UTC

Good morning.

Do business leaders need to be moral leaders? Dov Seidman, CEO of LRN, says the answer is yes, and has some new research to back that up. He provided an early look to members of Fortune’s CEO Initiative in a phone conference yesterday morning. Top line: in a survey of 1,100 executives, managers and employees, 87% agreed the need for moral leadership in business is greater than ever. And nearly three-quarters said they felt their companies would perform better if their leaders displayed moral leadership.

Why does it matter? Because in today’s fast paced world, Seidman says, the job of effective leaders has changed from “doing the next thing right”—something, increasingly, machines can handle—to “doing the next right thing”—which involves moral choice.

“There are unprecedented forces out there that are drastically reshaping the world,” putting greater demands on business leaders. As a result, “the business of business is no longer just business. The business of business is society.”

Seidman has been making this case for a number of years—including during this appearance at the Fortune Global Forum held in Rome and at the Vatican in December 2016. The new research shows a growing number of business leaders share his view. That’s a step in the right direction.

But here’s the rub: only 7% of employees surveyed said their leaders often or always exhibited the behaviors of moral leadership. Moral leadership may be in greater demand, but it is still in short supply.

More news below.

Top News

Google Suit

Alphabet's board is being sued by shareholders over its approval of Andy Rubin's $90 million payout, which took place amid a cover-up about sexual harassment at the company. Investors claim the board, including Larry Page, Sergey Brin, John Doerr and others, failed in their duties. Bloomberg

Olympus Activists

The Japanese cameras-and-medical-devices outfit Olympus will have to accept three foreign board directors for the first time, thanks to activism from U.S. hedge fund ValueAct—for which Olympus is the first Asian investment. Olympus president Hiroyuki Sasa will also step down in April. Olympus's shares rose 10% on the two announcements. Financial Times

Huawei Arrest

The tensions around China's Huawei just ramped up yet again, with the arrest of a Chinese Huawei employee in Poland on spying charges. Also arrested was a Polish employee of mobile carrier Orange's local subsidiary. Reuters

Talks Collide

Ladies and gentlemen, we have a new "most ambitious crossover event in history": the timing of continued China-trade-war talks on U.S. soil is being threatened by the fact that U.S. government-shutdown talks have collapsed. Wall Street Journal

Around the Water Cooler

iPhone Discounts

Chinese retailers are slapping hefty discounts on iPhones because Apple's products are too expensive and not as innovative as those from local players such as Huawei. The first part is old news—witness the share-price slump that greeted Apple's recent revenue warning. As for the second, well, it seems notches aren't innovation. CNBC

Hong Kong Airlines

Hong Kong Airlines insists it will be able to pay $550 million in debts in a timely fashion, even though some claim it's under strain. Per the South China Morning Post, the carrier has "delayed the delivery of expensive new planes, reportedly paid staff late, and cut back on perks for its employees at hotels." SCMP

Shutdown Stats

How much is the government shutdown costing the U.S. economy? According to a BBC report, economists say the impasse is cutting 0.04%-0.07%, or around $1 billion on average, off U.S. GDP each week. That's relatively small. BBC

WEF Miss

President Trump will not be jetting to Davos this month, because of the continuing wall-funding-approval deadlock. "My warmest regards and apologies to the [World Economic Forum]," he tweeted, blaming the Democrats. NBC News

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.

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