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It’s a sign of the sad state of U.S. public debate that nothing escapes political polarization these days, business included. Rising corporate attention to social issues—racial justice, climate change, inequality—is derided by commentators as “woke” behavior, with pundits on the left dismissing it as insincere posturing, while those on the right attack it as unwise politics. Friday’s commentary by the editorial board of the Wall Street Journal—”Woke Capital’s Political Warning“—is just the latest.
But when you talk to CEOs who are leading the way on this, their justification is strictly business. They’re motivated first and foremost by winning the war for talent, but also by opportunities to differentiate themselves with customers and investors.
That was clear at a session Fortune held last week, in collaboration with McKinsey & Co. Beth Ford, CEO of Land O’Lakes, who has been focusing on the need to support rural communities, says it is “not a political statement,” but rather critical to the long-term survival of her business. “I was not from a small town; I was from the big city.” But in her new job she came to the “recognition that there was a hollowing out of rural communities. And to me, the way I thought of that from a business perspective is that this is where our members live.”
Likewise, Dan Schulman, CEO of PayPal, changed the way his company set wages for call center workers, focusing on their net disposable income rather than prevailing market wages. “I think it just kind of makes common sense that the number one constituency that every CEO probably cares the most about is their employees. I mean, everything emanates from that.”
David McKay, CEO of RBC, has spent a good bit of his time and attention on creating apprenticeships and training programs to provide pathways to good jobs for disadvantaged young people. With the shortage of talent the bank faced, he said, “there was an intersection of community needs and corporate need that led us to focus on youth and youth inclusion and youth diversity.”
“At the end of the day, your biggest differentiator is going to be: do you have the best talent?” said Chip Bergh, CEO of Levi Strauss. “So doubling down on talent is critical. And so the large investors, BlackRock, Fidelity, the guys that are long-term investors and companies, they want to know what you are doing on diversity and inclusion, what you are doing to drive engagement with employees.”
So don’t expect it to stop. The business focus on social goals is not a passing political play. It’s a fundamental business trend. And all signs suggest it will continue to grow.
Separately, my vote for the best Super Bowl ad goes to GM, for its very funny “We’re coming for you, Norway” spoof. It may even convince me to buy a GM EV. Watch it here. News below.
South Africa was just starting its rollout of Oxford/AstraZeneca's vaccine…and then it stopped, after the lead investigator in the trial reported "disappointing results" in combating the South African variant of the coronavirus. That's bad news obviously, but the good news is that Johnson & Johnson's vaccine is effective against the variant, at least when it comes to severe illness and death. So J&J's vaccine will be rolled out instead, starting with health workers. Daily Maverick
Ngozi Okonjo-Iweala is set to become the first female head of the World Trade Organization, after the Biden administration backed her and South Korean rival Yoo Myung-hee pulled out. The Nigerian former finance minister spent a quarter-century at the World Bank and is now chair of the Center for Global Development. Okonjo-Iweala says she will focus on reforming the WTO. New York Times
Bad news for those expecting Kia to make Apple's autonomous car: talks between Apple, Kia and Hyundai (Kia's parent) have broken down with no agreement. Shares in both carmakers tumbled as a result. Fortune
China has introduced new antimonopoly guidelines restricting price fixing, the use of algorithms and data to manipulate companies, and forcing merchants to choose between platforms on which to sell their goods. The State Administration for Market Regulation (SAMR) also just cracked down further on ecommerce platform Vipshop, over its use of an information-gathering system that helped it influence consumer choices. Fortune
AROUND THE WATER COOLER
Nasdaq at 50
Half a century in, Nasdaq—the company, as opposed to the exchange it operates—is reinventing itself as a fintech heavyweight. As Fortune's Shawn Tully explains: "With $2.9 billion in revenues in 2020, and a market cap of $24.6 billion, Nasdaq is a midsize player by corporate standards. What’s generating the excitement is its potential to far exceed the modest prospects of the mature investment-exchange business, by selling technologies it uses itself to the wide world of financial services." Fortune
There are growing calls for drugmakers to share their technology and intellectual property as regards COVID-19 vaccines, so that other manufacturers can get producing too. This isn't just about altruism: if the whole world doesn't get vaccinated, the pandemic will persist, and production is probably a greater blocker to that happening than funding is. Fortune
The U.S. lacks a physician workforce that is demographically representative of its population, writes G. Richard Olds, president of St. George's University, in a piece for Fortune: "Greater diversity within the U.S. physician workforce is crucial to boosting health outcomes and access to care. To align our nation's doctors with our nation's patients, we must ensure that more nontraditional students have the opportunity to pursue careers in medicine." Fortune
Fortune's Shawn Tully looks at a range of metrics that could indicate the stock market is overvalued by as much as a third. "The bulls have a point in arguing that earnings will jump way beyond the 2019 record this year, and soar from there," he writes. "But it's not a strong argument. Earnings have never grown to the sky before. The more stock prices keep spiking from towering to more towering peaks, the more likely they are to tumble." Fortune
This edition of CEO Daily was edited by David Meyer.