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Good morning. David Meyer here in Berlin, filling in for Alan.
As we head into a much-deserved weekend, I’d like to draw your attention to a couple of worthwhile reads.
The first is this LinkedIn post from HP CEO Enrique Lores, following an appearance before the California Senate yesterday by HP’s strategy chief, Kim Rivera. Rivera was there to express the company’s support for a state bill that would force firms to diversify their boards.
Here’s what Lores had to say on the matter:
“It’s an important piece of legislation. I urge the legislature to adopt it and Governor Newsom to sign it into law. But we shouldn’t have to rely on the Governor’s pen to make our boards more diverse. Business leaders should be doing that on our own.
“This isn’t just the right thing to do. Study after study has shown how gender and ethnic diversity can help power innovation and strengthen a company’s performance. For example, McKinsey has found that companies with more women and more ethnic diversity at the executive level are more profitable, and they’ve also found that companies with more diverse boardrooms enjoy significantly higher earnings and returns on equity.”
HP itself certainly walks the talk; as Lores noted in his post, its board is 58% minorities, and 42% women. “Yet, we also know we have a lot more work to do—as a company and industry—to finally shatter the barriers that have prevented true equality and fairness for far too long,” he wrote.
And speaking of McKinsey studies, here’s a new report from the consultancy on the outlook for corporate travel. It suggests business travel will take longer to recover than leisure travel will, and it’s crucial for travel players to understand which segments will return first.
According to McKinsey, the earliest revival for business travel will be for in-person sales and client meetings. Internal meetings, conferences and events won’t be significant drivers until “well into 2021” or later, while “some travel for internal purposes will be permanently replaced by virtual meetings and collaboration.”
More news below.
David Meyer
@superglaze
david.meyer@fortune.com
TOP NEWS
App showdown
Fortnite developer Epic Games decided to force Apple's hand on the contentious issue of the smartphone firm's 30% revenue cut for in-app payments. Epic launched a direct purchase plan for items in the hugely popular game. So Apple pulled Fortnite from the App Store. Google did the same in its app repository. Now Epic is suing both companies. Not great timing for Apple, given how regulators in Europe and the U.S. are currently taking a close look at its control of the iOS ecosystem. Fortune
Israel and UAE
The United Arab Emirates has agreed to formal diplomatic ties with Israel, in a U.S.-brokered deal that will see Israel suspend further annexation of Palestinian territories. It should be noted that political pressure back home had effectively already put such annexations on ice. Nonetheless, the deal is a significant policy win for President Trump, and one that has been welcomed by Joe Biden. Here's a good analysis of the drivers and implications. New York Times
Michigan road
Michigan plans to build "the world's most sophisticated roadway"—specifically, a corridor between Detroit and Ann Arbor that will be reserved for autonomous vehicles. Infrastructure startup Cavnue is leading the project, with the backing of Ford, GM and Alphabet's Waymo. A key part of the plan is the development a common software standard that will be used by cars, shuttles and trucks, allowing governments to charge for access to the road, in order to subsidize transport. Fortune
iQiyi probe
The Securities and Exchange Commission has launched a probe into potential fraud at Chinese streaming service iQiyi. According to "activist research and due-diligence firm" Wolfpack Research, the Nasdaq-listed Netflix rival inflated its 2019 revenue by as much as $1.98 billion, while also overstating user numbers and expenses. iQiyi's shares fell more than 18% after news of the investigation broke. CNBC
AROUND THE WATER COOLER
Trump and USPS
President Trump has now plainly said he is holding up U.S. Postal Service funding in order to stymie universal mail-in voting in the November elections. But could his plan backfire? According to history professor and former postal worker Philip Rubio, Trump's "political sabotage" and the recent managerial actions of his Postmaster General, Trump donor Louis DeJoy, could spark outrage among those who still rely on the USPS for essential deliveries. Politico
Yale admissions
Yale University has been discriminating against Asian-American and white applicants in favor of Black applicants, according to the Justice Department, which said: "Yale rejects scores of Asian American and white applicants each year based on their race, whom it otherwise would admit." Yale claims the Justice Department reached its conclusions "before reviewing and receiving all the information it has requested." If Yale doesn't reform its admissions practices within two weeks, the department says it will sue. Wall Street Journal
Jobs action
Sara Nelson, president of the Association of Flight Attendants-CWA (and an advisor to the Democrats), writes for Fortune that millions of workers will lose their jobs unless Congress passes a relief package. She writes: "Many of the 55 million who filed for unemployment have stayed afloat because of the $600 enhanced unemployment benefit Congress included in the CARES Act. But that program ended on July 31, and economists from across the spectrum are warning that we’re headed for disaster unless Congress acts." Fortune
Rewarding hospitals
Hospitals' and health systems' work to advance population health, reduce disparities and inequality, and impact the social determinants of health, should be routinely assessed and rewarded. That's according to physicians and health-policy experts Kyu Rhee, Joshua Sharfstein and Rachel Thornton, writing for Fortune. "We can begin to incentivize a commitment to community health and equity if we embed it into our evaluations of hospital performance," they write. Fortune
This edition of CEO Daily was edited by David Meyer.
