Widespread CEO commentary on the George Floyd killing is a new phenomenon
This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
I’m going to run long today, in order to highlight the outpouring of CEO commentary on the George Floyd killing. As I’ve said here before, this sort of CEO public reaction to controversial social issues just didn’t happen a decade or more ago. Someone check my memory, but I don’t recall a flood of CEO sentiment after the Rodney King beating.
This time, the heartfelt statements were hard to keep up with. A sampling of the many:
“The tragic and unnecessary death of George Floyd in Minneapolis earlier this week and the ensuing unrest are glaring reminders of the progress we need to make to have a truly equal and just society.”
–Mike Corbat, Citigroup
“We cannot lose sight of the fact that racism is tearing our communities apart. One lesson we should all learn is that silent carriers help spread racism.”
–Arvind Krishna, IBM
“Regardless of race, gender, nationality, sexual orientation, abilities, wealth and educational background or any other point of human difference, each person deserves to be recognized for who we are and respected for both our common humanity and the distinct qualities that make us unique…George Floyd won’t get that opportunity. But we can honor his memory by leading our own lives in a way that pierces through prejudice to embrace and know people as individuals.”
–Arne Sorenson, Marriott
Today, there are four black CEOs leading Fortune 500 companies. That’s less than 1% of the total. The comments of this group were particularly poignant:
“My wife & I feel tremendous sadness as our hearts & prayers are with the families of George Floyd, Ahmaud Arbery, Breonna Taylor & all communities ripped apart by violence. As the father of a young black male, I can only imagine their pain & emptiness.”
–Marvin Ellison, Lowe’s
“As brands whose core values are powerfully informed by the creative tension that cannot exist without diversity and inclusion, we cannot succeed if the ideal that is America does not succeed, including in different and diverse ways globally. We cannot attract and engage talented colleagues. We cannot design beautiful and functional products. We cannot authentically engage with consumers around the world.”
–Jide Zeitlin, CEO Tapestry (formerly Coach)
And then this bracing call to action:
“Business needs to go to the seat of government not only for its own economic self-interest in the short term but also to think about how to create a society that is going to actually be good for business. We can’t have this toxic environment for much longer.”
–Ken Frazier, Merck
Fortune, of course, only compiles the Fortune 500; we are far from being on it. But I also shared my sentiments with staff yesterday. An excerpt:
“As someone who moved to the segregated South just as the controversy over school busing was taking hold, I have watched this movie run for far too long. My proudest memories of my mother, who made a habit of walking out of rooms whenever any racial slight was suggested, are a constant reminder to me that looking the other way is just as incriminating as participating in the act.”
Separately, a new episode of Leadership Next is out this morning, featuring the charismatic CEO of Novartis, Vas Narasimhan. You can listen to it here. Vas is part of an amazing outpouring of energy in the pharmaceutical sector aimed at defeating the virus, and he gave Fortune Editor-in-Chief Clifton Leaf his unique perspective on how that war is going. (Spoiler: he doesn’t see a vaccine being rolled out broadly for 18 months to 2 years.)
And finally, a plug for a remarkable event that Fortune is hosting virtually next month: Fortune Brainstorm Health. At a time when the world is struggling with the health and economic implications of the coronavirus, we are bringing together CEOs of Johnson & Johnson, Amgen, Baxter, Bristol-Myers Squibb, Centene and the Mayo Clinic, as well as thought leaders like Dan Ariely, Jennifer Doudna and Niall Ferguson, to provide an early look at the post-Covid future. There are still a few spots available for this highly interactive event. If you are interested, go here to apply. CEO Daily readers get a 50% discount if they use this code: BSH20HALF
Phew. Apologies for the length. More news below.
President Trump has threatened to send the military to quell protests across the country, unless cities and states step up their actions against the protests. Trump characterized the protests as "acts of domestic terror" and told governors to "dominate" their streets with National Guard units. The 1807 Insurrection Act, which Trump would need to invoke in order to deploy the military on American streets, has not been invoked since the Rodney King riots in 1992. Financial Times
Many Facebook employees staged a virtual walkout (most are working remotely) yesterday, in protest at the company's decision to leave up President Trump's inflammatory posts about the Minneapolis protests. Mark Zuckerberg says the posts are fine unless they cause "imminent risk of specific harms or dangers." Trump's posts said that "when the looting starts, the shooting starts." Fortune
The Congressional Budget Office has predicted that the U.S. economy will take most of a decade to recover from the coronavirus pandemic. The agency said it was marking down its 2020-30 forecast for U.S. economic output by around 3% of GDP, relative to projections it released in January. BofA Merrill Lynch chief U.S. economist Michelle Meyer: "After you get the initial bounce of economic activity simply from removing the lockdowns, I think what we’ll see is an economy that is running at a level of activity notably below where we were prior to Covid." Wall Street Journal
Lufthansa's share price jumped more than 8% this morning after a bailout drew closer. The German flag carrier's supervisory board yesterday approved a compromise that would see Lufthansa hand over lucrative operating slots at its key Frankfurt and Munich hubs, in order to win EU approval for the bailout. If the deal goes through, the German state would likely become Lufthansa's biggest shareholder. Bloomberg
AROUND THE WATER COOLER
China's largest contract chipmaker has filed for a Shanghai listing that it hopes will bring in around $2.8 billion. Semiconductor Manufacturing International Corporation (SMIC) may have to take on more production soon, due to escalating U.S.-China trade tensions—U.S. sanctions may stop other chipmakers, such as Taiwan's TSMC, from supplying chips to blacklisted Huawei if they make those chips using U.S. machinery. CNBC
Following further COVID-19 outbreaks, South Korea is testing a new system that would see people having to scan a QR code when they visit high-risk restaurants, churches and entertainment facilities. Scanning the code will put the phone user's information in a centrally-held database for several weeks, so they can be more easily traced if an outbreak is linked to the facility they visited. Reuters
House prices in the U.K. have fallen at the sharpest rate since the financial crisis. The average home price fell by 1.7% from April to May. Potential house-buyers say they are likely to wait half a year or so, in the hope that the worst of the pandemic will have blown over by then. Guardian
Carolyn Fairbairn, the director general of the Confederation of British Industry, writes for Politico that there is still a risk of no U.K.-EU trade deal appearing by the end of this year, when the Brexit transition period ends. This would be a "shocking outcome" for businesses, especially in the context of the pandemic: "For many firms fighting to keep their heads above water through the crisis, the idea of preparing for a chaotic change in EU trading relations in seven months is beyond them. They are not remotely prepared. Faced with the desperate challenges of the pandemic, their resilience and ability to cope is almost zero." Politico
This edition of CEO Daily was edited by David Meyer.