Taking a Stand: CEO Daily
One of the most remarkable moments in the emergence of corporate social consciousness over the last few years was when Dick’s Sporting Goods made the surprise decision to stop selling assault-style rifles after the Parkland shootings. The backlash from NRA members was swift and severe. But Ed Stack, the CEO of Dick’s, was determined. In his new autobiography—It’s How We Play the Game: Build a Business. Take a Stand. Make a Difference—he says the tragic shootings made him realize that, as one of the four biggest U.S. sellers of firearms, his company was “part of the problem.” And he wanted to become part of the solution.
In an interview with Fortune’s Phil Wahba, Stack says he is not looking back. Indeed, he’s removed guns altogether from 125 of his 727 stores. And he says the whole hunting business is up for “strategic review.” Read that: stay tuned for further action.
“We sold that kid in Parkland a shotgun,” he said emotionally (although it wasn’t the weapon used in the massacre.) “He should never have been able to buy a shotgun from us.” You can read more from Phil’s interview here.
And since it is Friday, some feedback. My Tuesday post on the Business Roundtable’s letter to Elizabeth Warren drew some skepticism. This from J.H.:
“When the first BRT Member Company’s annual report shows that senior-level executive compensation is based on well-defined, measurable outcomes over specific periods of time related to stakeholder values, then I might consider those behind the statement to be sincere.”
And this from D.G.:
“The BRT’s letter points to the fact that ‘MANY of our companies have taken steps to increase their own minimum wage’ [emphasis added)… Oh boy! You mean that you’ve announced that the nature of capitalism has shifted towards all stakeholders and yet the entire group, no wait, not even MOST of the entire group has led on the minimum wage issue?”
As I’ve said here before, there is a level of seriousness among business leaders on these issues today that is qualitatively different from anything I’ve seen in the past four decades. But there also is an unprecedented level of public cynicism. Climbing over that mountain of mistrust won’t be easy.
More news below.
No woman has ever been CEO of a Wall Street bank and, as Fortune's Claire Zillman recently reported, in April Citigroup CEO Michael Corbat did not seem to believe his successor would be female. Well, Citigroup just promoted its Latin America chief, Jane Fraser, to be its president and head of its consumer bank—Citi's number two executive role, and a stepping stone to Corbat's role once he vacates it. Wall Street Journal
Indonesian investigators' final report into last year's Lion Air 737 Max crash points fingers at flaws in the design and certification of Boeing's new flight-control system, as well as the airline's pilots and maintenance work, plus a Florida part supplier. The report details the flight's last minutes, in which the crew battled to regain control over the plane's nose-down movements. Seattle Times
The International Energy Agency says offshore wind power can entirely meet the world's energy needs, and will become competitive with fossil energy within the next decade, thanks to falling costs. IEA executive director Fatih Birol: "Looking at the future of offshore wind . . . it has the potential to join the ranks of shale and solar photovoltaics in terms of steep cost reductions." Financial Times
Amazon and Twitter both suffered heavy share-price drops (6.6% and 20.8% respectively) following the release of their results. Stung by rising shipping costs, Amazon disappointed analysts with EPS of $4.23 rather than $4.62, and irked investors with poor revenue guidance for the holiday season. Twitter reported revenues of $823.7 million rather than the expected $874 million, and CNBC blamed technical bugs and lower-than-expected advertising. CNBC
AROUND THE WATER COOLER
So, will Twitter ever sign up to Facebook's Libra cryptocurrency play? "Hell no," says CEO Jack Dorsey. "It’s not an Internet open standard that was born on the Internet. It was born out of a company’s intention, and it’s not consistent with what I personally believe and what I want our company to stand for.” The Verge
Barclays posted a $375 million net loss for the last quarter, thanks to being hit by $1.8 billion in insurance claims relating to the mis-selling of payment protection insurance. In Q3 last year, Barclays made $1.3 billion in net profit. Nonetheless, its investment banking unit is becoming more profitable, and Barclays' share price rose slightly on its results. CNBC
Google claims to have harnessed the power of natural-language understanding to improve its search results, in an update that will start rolling out soon. The company says this is the biggest change to its core product that it's instituted in five years, and one that will improve one in 10 searches. The technology is an A.I. model called BERT. Fortune
The EU today discussed how long an extension to grant the U.K. for its departure from the bloc, but did not come up with an answer. Meanwhile, British Prime Minister Boris Johnson will on Monday try to call a general election in order to formulate a new Parliament that might actually reach agreement on Brexit. But the law means two-thirds of Parliament need to agree to an early election, and opposition parties don't want to play ball. Guardian