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Good morning.
Critics of the movement toward “stakeholder capitalism” like to argue that until corporate accounting and governance rules change, shareholder primacy will reign supreme. (If you didn’t understand that last sentence, read my story here.) I agree with their point. It took over a century for us to develop the elaborate accounting scaffolding that surrounds today’s public companies, and it will take more than one statement from the Business Roundtable to change it.
But an important step forward occurred yesterday. The World Economic Forum, working with the big four accounting firms, released a report with the ponderous title Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation. You can download it here. It’s a large document and will take some time to digest. But if you care about this issue, it is an absolute must read.
I’ve attended the World Economic Forum in Davos, Switzerland, for more than 20 years now—mainly for the unmatchable opportunity to network with so many powerful, famous and even thoughtful people—all packed into one tiny mountain village. To be honest, I’ve never considered it much more than an elaborate gabfest.
This new paper, however—which is the result of an extensive, year-long effort—is something different. We know that what gets measured gets managed. Without an agreed upon set of metrics, shareholder capitalism would remain a mere promise. Now we have them: 21 core metrics that set a common framework for measuring how companies are meeting the needs of people and planet. I’m sure CEO Daily readers will find things to disagree with in here—and I welcome hearing your feedback. But in my view, this is one big step forward.
By the way, in addition to WEF head Klaus Schwab, a big dose of credit goes to Bank of America CEO Brian Moynihan, who headed the committee that produced this work and lent his considerable credibility to the effort. I talked with Moynihan about it a few weeks ago on our podcast Leadership Next. You can listen to that episode here.
Let me know what you think. More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Online liability
The Justice Department has proposed curbing legal protections that shield the likes of Facebook and Twitter from liability related to their users' actions on their platforms. President Trump describe the proposal as "concrete legal steps to protect an open internet and a free society." Democratic Senator Ron Wyden, who co-authored the legal protections, claimed the proposal was "a warmed-over mishmash of existing Republican proposals to force private companies to host lies, misinformation, hate speech and other slime online." That said, Joe Biden also wants to revoke the relevant protections, in order to counter the spread of false information. Wall Street Journal
Peaceful transition
President Trump yesterday declined to commit to a peaceful transition of power, in the event that he loses to Joe Biden in November. Trump: "We're going to have to see what happens. You know, I've been complaining very strongly about the ballots and the ballots are a disaster." Democrat Adam Schiff responded with: "This is how democracy dies." BBC
Cinema loss
Cineworld Group, the London-listed owner of U.S. cinema chain Regal, has posted a loss of $1.64 billion for the lockdown-heavy first half of the year. It also warned about fresh lockdowns: "If governments were to strengthen restrictions on social gathering, which may therefore oblige us to close our estate again or further push back movie releases, it would have a negative impact on our financial performance and likely require the need to raise additional liquidity." MarketWatch
Vaccine trials
The British government is considering so-called "challenge trials" for candidate coronavirus vaccines, which would involve deliberately exposing healthy people to the pathogen. Challenge trials could speed up the testing process, as it means not having to wait for trial participants to become naturally exposed to the virus. But they raise ethical questions, too. Fortune
AROUND THE WATER COOLER
Drug war
Documentarians Sebastian Junger and Nick Quested write for Fortune that U.S. policies are largely to blame for the dysfunction that leads many Central Americans to flee north. But, they say, better U.S. policy could also fix the problems by improving living conditions in Central America and Mexico and fighting corruption there. Fortune
Sweetheart deals
EU competition czar Margrethe Vestager seems determined to appeal the striking-down of her $15 billion Irish back-tax bill for Apple. Many experts say that would be a risky move, both legally (an appeal would need to be based on points of law, and the judgement striking down the tax ruling was largely based on the facts of the case) and politically. But meanwhile, the European Commission is pressing on with its campaign against sweetheart corporate tax deals. Politico
COVID maps
The iOS and Android versions of Google Maps now feature a COVID-19 layer, showing case numbers and trends for many cities, counties, provinces and countries. Google says the tool will help people "make more informed decisions about where to go and what to do." CNBC
Pandemic algorithms
Consumer behavior changed drastically once the pandemic hit, so consumer-focused businesses' algorithms have had to change too. As Accenture applied intelligence chief Lan Guan put it in a Fortune-organized online chat, "A.I. is actually a living and breathing engine." Fortune
This edition of CEO Daily was edited by David Meyer.
