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Good morning.
The debate over stakeholder capitalism is still going strong—at least in my inbox, as well as in the business press. Opinions range from Friedmanites who insist CEOs should focus only on shareholders, to cynics who think the stakeholder issue is a public relations smokescreen to obscure corporate misdeeds.
But interestingly, there isn’t much debate among CEOs themselves. I spent a couple of hours yesterday in off-the-record conversations with members of Fortune’s CEO Initiative, which reinforced my conviction that critics from both sides miss the mark. These were “Chatham House Rule” conversations, which means I can’t report specifics. But that also means that the CEOs weren’t in it for the publicity. Instead, they were genuinely struggling with their role at a time when employees, customers, investors and society are demanding ever more of them.
The social issues discussed—combatting climate change, creating training and employment opportunities, expanding diversity and inclusion, addressing COVID and other health care crises—once may have been considered the province of governments. But companies clearly have a role. And in the absence of government leadership, CEOs feel increasing pressure to step up. They uniformly insist that doing so is good for their business—and ultimately, good for their shareholders.
One CEO who exemplifies the trend is Chip Bergh of Levi Strauss, who is our guest this week on the podcast Leadership Next (Apple/Spotify). In the wake of the Parkland shooting, he took a strong stand in favor of sensible gun control—even though many Levi’s wearers own guns. More recently, he’s led an effort to ensure workers are given time off to vote—even though some believe such efforts favor Democrats.
“I firmly believe that CEOs have a role to play in making the world a better place,” Bergh told Ellen McGirt and me. “One of the reasons I joined Levi Strauss is that this company has had for its entire 167 years a practice where the CEO is expected to take stands on important issues of the day. It goes back to our founder.” He says the public stance on issues is important for his customers. “We target Gen Z and understanding where their mindset is on what’s important in this world. It’s gun control. It’s climate change.” And it’s also important to employees. “We sit in the heart of Silicon Valley and the reason we are able to attract great talent and retain great talent is because of the values we have and our fearlessness in taking these stands.”
By the way, Chip Bergh was one of 100 CEOs who accompanied Fortune to the Vatican in 2016, when we focused on the role the private sector can play in addressing global social problems. “I may be the only person who has met the Pope wearing jeans,” he claims.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Zoom outlook
Zoom has done so well during the pandemic that it has now twice raised its full-year outlook. For the July quarter, analysts expected $500 million in sales and $134 million in profit; they got $663.5 million and $185.7 million respectively. In the same quarter a year ago, Zoom's sales totaled $145.8 million. Shares are up over 20% in pre-market trading this morning. Wall Street Journal
iPhone demand
Apple is having roughly as many new iPhones made for this year's launch as it did for last year's, indicating that it expects demand to hold up despite the pandemic and recession. The upcoming iPhone, tipped for announcement next month, will reportedly feature 5G connectivity. Bloomberg
Facebook Australia
Facebook intends to block people and publishers in Australia from sharing news, so that the company doesn't have to pay media firms for their articles as a proposed law would require. A similar law has been introduced in Europe, where Google News is seen as the main target. Fortune
Trump odds
The odds of President Trump's re-election are rising, according to JPMorgan Chase, which reckons the odds are now fairly even due to public opinion regarding violence at protests. Strategist Marko Kolanovic: "Certainly a lot can happen in the next ~60 days to change the odds, but we currently believe that momentum in favor of Trump will continue, while most investors are still positioned for a Biden win." Fortune
AROUND THE WATER COOLER
.io controversy
The .io domain name extension may be associated with the tech and cryptocurrency worlds, but it is actually linked with Indian Ocean islands from which the U.K. expelled the inhabitants just half a century ago. Now the Chagossian people want their land back—and .io, perhaps the islands' most lucrative resource, with it. Fortune
Musk worth
Elon Musk has become the third-richest person in the world, slightly overtaking Mark Zuckerberg thanks to a rally following Tesla's stock split. Musk's net worth grew by $76.1 billion this year, as Tesla's share price grew by over 475%. Fortune
Systemic racism
TIAA CEO Roger Ferguson, one of the few Black CEOs in the Fortune 500, has four tips for how corporate leaders can help overcome systemic racism: own your part; set the tone at the top; empower your people; and strengthen your community. Fortune
Irish tax
Much of Ireland's business community is relieved that a top EU court scrapped Apple's $15.5 billion back-tax bill, because the charge was seen as a disincentive to foreign direct investment in the country. But the issue of multinationals' taxation isn't going away anytime soon. CNBC
This edition of CEO Daily was edited by David Meyer.
