The ECB’s Christine Lagarde thinks the global economy is past the worst
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Good morning. David Meyer here in Berlin, filling in for Alan one more time before I sink into my summer holiday (and yes, it will largely be a staycation.)
European Central Bank chief Christine Lagarde doesn’t always get her assessments right—who could forget the abrupt u-turn she had to perform on the need for a monetary response to the pandemic?—but let’s hope she’s right this time, because the ECB president thinks the world’s economy might now be past its coronavirus trough.
“We probably have passed the lowest point and I say that with some trepidation because of course there could be a second wave,” Lagarde said at a summit this morning, before noting that the recovery “is going to be incomplete and might be transformational.”
Again, let’s hope she’s right about passing the lowest point. But a glance at the global statistics shows that daily case numbers continue to climb.
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Separately, Brian Stafford–the CEO of Diligent, a software platform for corporate governance–yesterday told a Fortune virtual gathering that his company today is launching a major new initiative to promote racial diversity on corporate boards.
The gathering, which was held in conjunction with McKinsey & Company, included John Rogers of Ariel Investment, a longtime advocate of boardroom diversity who said progress has been far too slow. “Business can’t be a bystander in economic justice,” said McKinsey’s Lareina Yee. “It needs to be a leader.” Rogers told the story of Atlanta Mayor Maynard Jackson in the 1970s telling his city’s top companies that they had to put black business people on their boards if they wanted to keep operating in the city. “That’s the kind of opportunity we need to see in the C-Suite.”
Stafford said the Diligent platform includes 700,000 board members, and he will be calling on that network to “nominate diverse, board-ready leadership” and to “create more visibility into the pipeline” for board members. He said 10 of the large private equity firms that use his platform have committed to creating “five incremental new board roles each” for diverse director candidates.
“I think we actually have the potential to move the numbers,” Stafford said. More detail here.
Alan Murray contributed to this essay.
Texas has paused its reopening and Florida is also holding off moving to the next reopening phase, as COVID-19 figures continue to climb. California, too, is warning that its reopening plans could be affected if a lot more people end up in hospital. The CDC now estimates that the real number of Americans who have been infected so far is perhaps ten times the official case count of 2.4 million. Wall Street Journal
As the crisis begins to swell again in the U.S., and as some estimate 27 million people may have lost their job-based health insurance due to the shutdown, the Trump administration is moving to eradicate the Affordable Care Act. It asked the Supreme Court to overturn the Obama-era legislation yesterday. The case will likely not be heard before the fall. Fortune
Germany's banking regulator, BaFin, not only failed to spot the massive alleged Wirecard accounting fraud that auditors say took place—it imposed a short-selling ban on Wirecard shares for a couple months last year, and filed a criminal complaint against journalists who reported whistleblower allegations. Now the European Commission will tell Esma, the EU's top markets supervisor, to examine BaFin's handling of the fiasco and find out what went wrong. Financial Times
The Dutch government is giving Air France-KLM's Dutch operations a $3.8 billion bailout, which comes on top of the $7.9 billion that the French government is giving Air France. As in the French case, the deal comes with environmental strings attached. KLM will also have to cut some jobs—and scrap dividend payments. Bloomberg
AROUND THE WATER COOLER
Accenture CEO Julie Sweet writes for Fortune that the challenge for organizations now is how to accelerate digital change during a crisis. "Leaders have adopted automation and A.I. five times faster than laggards, and have put in place strategies that give them high confidence in the reliability of their data," she writes, arguing that those who risk falling behind need to follow a new set of rules. Fortune
Some of the firms that slashed their CEO compensation as the coronavirus lockdown took hold, have already started to reinstate it. The New York Times and Fortune have both found examples of companies—Darden Restaurants, Rollins Inc., Meritor, Ascena Retail Group—that are restoring CEO and/or C-suite pay to what it was barely a quarter ago. The economy, of course, is nowhere near where it was before the crisis hit. Fortune
Climate Pledge Arena
Amazon has bought the renaming rights to the New Arena at Seattle Center, which used to be known as KeyArena and will now become Climate Pledge Arena—in the words of Jeff Bezos, the name will provide "a regular reminder of the urgent need for climate action." Appropriately, Amazon plans to make it the first "net zero carbon certified arena in the world." The hockey ice will even use reclaimed rainwater. Business Insider
The World Health Organization put Sweden on a list of countries where “accelerated transmission has led to very significant resurgence that, if left unchecked, will push health systems to the brink once again in Europe." The controversial Swedish COVID-19 czar Anders Tegnell claims the WHO made a "total mistake" and did not take into account the nuances in Sweden's testing approach. Tegnell is also reconsidering his opposition to people wearing face masks, as the WHO has recommended. Bloomberg
This edition of CEO Daily was edited by David Meyer.