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CEOs aren’t promoting stakeholder capitalism for the publicity

September 1, 2020, 9:17 AM UTC

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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


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Irish tax

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This edition of CEO Daily was edited by David Meyer.