Good morning.
Yesterday’s story on the end of shareholder primacy drew lots of reaction, in my email and on my Twitter feed. Most readers think, as do I, that elevating the interests of other stakeholders—customers, employees, communities, the environment, etc.—is a good thing. But a few worry it will lead to worse returns for shareholders, or that it is simply window dressing.
You can read the full story, which is in the September issue of Fortune magazine, here. It’s a significant change in the corporate mission, and deserves your attention. Some selected responses from readers below.
This from JZ:
“Thanks for your reporting on the Business Roundtable today. More cause for optimism! Raising the profile on the seismic changes in the way people lead and how great companies invest in making the world a better place is both urgent and important.”
This from DF:
“While I strongly support corporations having more social accountability, I can’t but help wonder if CEOs will try to use the ‘End of Shareholder Primacy’ as an excuse for not meeting financial projections. Until the social accountability goals are measurable and can be accurately weighed against financial performance, they’re just meaningless public relations fodder.”
This from BW:
“Every CEO focuses extensively on the “needs of society”…until they have a bad quarter.”
And finally, this from Prof. Klaus Schwab, founder of the World Economic Forum, who says the Business Roundtable is 48 years late to the party:
“As the “founder” of the stakeholder concept (published first in 1971), I am particularly happy about this new more society-oriented definition.”
This morning we also are publishing my colleague Adam Lashinsky’s interview with Anand Giridharadas, who has emerged as one of the most articulate critics of corporate do-goodism. You can read that interview here.
And if you don’t have plans for the week after Labor Day, consider coming to spectacular Fuxian Lake in Yunnan, China, where we are holding the first-ever Fortune Global Sustainability Forum. In his run up to the event, which you can read here, Jeffrey Ball argues that for companies, “action on the environment is starting to look smarter than inaction.” You may also want to read this piece by Ball on China’s electric car gold rush.
More news below.
Alan Murray
alan.murray@fortune.com
@alansmurray
TOP NEWS
Tech Antitrust
A pack of state attorneys general is reportedly preparing to launch an antitrust assault against Big Tech, perhaps as soon as next month. It's not yet clear which companies will be targeted, but they are likely to include Google, Facebook, Amazon and Apple. The Justice Department is already examining the sector's competition-related practices. Wall Street Journal
Huawei Extension
The U.S. has given Huawei another 90-day reprieve from sanctions, but also placed more of its affiliates on its Entity List. Huawei founder Ren Zhengfei told workers that those who fail face losing their jobs, and the company as a whole is experiencing a "live or die moment." Redundant staff need to either explore new projects or find jobs in the internal market, otherwise their salaries will be cut every three months. Bloomberg
Brexit Backstop
The British government, now helmed by Prime Minister Boris Johnson, has asked for the Irish "backstop" to be removed from the Brexit deal, in order to get the deal approved by the British Parliament and avoid a hard Brexit. Chances of the EU saying yes are homeopathically slight. Reminder: the backstop would keep the U.K. in a customs union with the EU, in order to avoid a hard border between Northern Ireland and the Irish Republic, but it would only take effect if there's no trade deal with the EU—and everyone says there will be a trade deal. Independent
German Recession
Germany's central bank reckons the country will fall into technical recession this quarter, due to a continuation of falling industrial production and orders. The Bundesbank is blaming Brexit and the U.S.-China trade war. Deutsche Welle
AROUND THE WATER COOLER
Sotheby's Sale
One of the biggest shareholders in auction giant Sotheby's is opposing its sale to telecoms billionaire Patrick Drahi. The British fund manager RWC has several concerns about the deal, including its $3.7 billion price tag, and the fact that Sotheby's didn't contact its largest shareholder—Beijing-based Taikang Life Insurance—to whip up a counter-bid. Financial Times
Texan Ransomware
Almost two dozen towns in Texas have been hit with what appears to be a coordinated ransomware attack. Such attacks lock up computer systems until the victim pays a ransom (and even then, their data may not be freed.) The attacks reportedly began Friday, prompting a just-shy-of-an-emergency Level 2 response from the state Governor's Office. CNBC
Hong Kong
Twitter and Facebook say they are trying to fend off a state-backed Chinese misinformation campaign designed to "sow political discord in Hong Kong." Fake groups and accounts were set up to undermine protestors. Twitter recently bowed to public pressure and stopped selling ads to China's Xinhua news agency. BBC
Disney Streaming
Disney's new streaming service won't be available on Amazon's FireTV platform when it launches in the U.S. in November. It's not yet clear why this is, though it could have something to do with last-minute negotiations over carriage fees. Fortune
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
