Good morning.
It’s Day 2 at Amazon. Jeff Bezos stepped down as CEO yesterday and is preparing for a shot into space. Long-time lieutenant Andy Jassy, who until recently headed up Amazon Web Services, has replaced him. (More on Jassy here.)
In preparation for the handoff, Amazon last week added two new entries to its famed set of 14 leadership principles:
—Strive to Be Earth’s Best Employer
—Success and Scale Bring Broad Responsibility
This is the belated Amazonian version of stakeholder capitalism. From its beginning, the company has been singularly “obsessed” with serving the customer. In the process, it provided extraordinary returns to shareholders—without ever having to worry much about the bottom line. Bezos famously fought off calls for broader corporate responsibility, sticking to a scrappy “It’s still Day 1” ethos, and arguing a “Day 2” mentality would lead to stasis and decline.
The new leadership principles represent a bow to the realities of the post-pandemic world. There’s a relentless battle for talent going on, fueled by the “work from anywhere” ethos that emerged during lockdown. And there is growing recognition that companies—particularly big ones—need the trust and good will of society if they are to survive and thrive. Bezos biographer Brad Stone wrote in the New York Times this weekend that Jassy’s “defining challenge” will be “to sandpaper the rough edges of Amazon’s business tactics and formulate a humbler image for the company, particularly before the many antitrust authorities trying to unravel the opaque, interlocking parts of the Amazon empire.”
But the question some are now asking is this: Will a less single-minded Amazon also be a less successful Amazon? This is a version of the broader critique leveled against stakeholder capitalism in general: Can a company catering to multiple “stakeholders” do as well as one focused on the simple math of “Total Shareholder Return”?
Over the last few years, I’ve quoted numerous top executives who make two fundamental points about the second question. First, the shift to a more stakeholder-focused capitalism isn’t really a choice—it’s something society is demanding. Amazon’s move further confirms that reality. And second, if properly executed, a strong focus on social benefits can, over time, improve financial results. There doesn’t have to be a trade-off.
Amazon Day 2 will be an important test of both principles.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
British gamble
England will in a couple weeks lift social-distancing and mask rules, despite the fact that COVID case numbers are shooting up—mostly the Delta variant—and only half the population is fully vaccinated. The policy could pretty much be summed up as "let 'er rip". Some experts say the gamble is worthwhile, but others are appalled. Scotland and Wales aren't following suit just yet. Fortune
Chinese tech
China's Internet regulator has placed two more U.S.-listed companies, after ride-hailing giant Didi Chuxing, under national-security review. The CAC has ordered local app stores to disappear recently-IPO'd Didi, whose shares have consequently plummeted in premarket trading, and now Full Truck Alliance ("Uber for trucks") and Boss Zhipin (recruitment) also seem to be in trouble. Fortune
Indian Twitter
The Indian government says Twitter has lost its legal immunity against the consequences of law-breaking user-generated content. The statement came in a court filing in a case relating to defamatory tweets. The government says Twitter isn't complying with new tech rules that came into play at the end of May. This could all be very bad news for U.S. tech firms operating in India. The Wire
Oil price
The crude oil price has hit $77/barrel after OPEC+ talks failed to result in a supply increase, thanks to Saudi Arabia and the UAE squabbling. This could have an impact on inflation and hence the global recovery. Fortune
AROUND THE WATER COOLER
Shampanskoye vs Champagne
In some very high-level trolling, President Vladimir Putin has signed a law saying only Russian champagne makers can call their products "champagne" on their Cyrillic-lettered labels in Russia. France is of course fiercely protective of the Champagne region's most famous output, and is protesting very loudly. LVMH’s Moët Hennessy is suspending shipments to Russia, but only so it can comply with the new law. Fortune
Southwest strategy
In the first installment of a new Fortune series called Strategy Session, the departing Southwest CEO Gary Kelly tells Fortune's Shawn Tully what he's learned about executive succession. A sample: "The evidence is strong that the CEO successions that are most successful choose internal candidates. We had too many really good candidates to look outside. It’s a big risk to bring in a CEO from the outside." Fortune
Semiconductor fears
Chinese-owned Nexperia has bought the U.K.'s largest semiconductor manufacturer, Newport Wafer Fab (NWF). British Conservative lawmaker Tom Tugendhat said the deal should be reviewed under new legislation designed to shield key national assets. Guardian
Green debt
Germany's Greens want to overhaul the country's famous "debt brake" (a restriction on new borrowing) as they say the pandemic has exposed "deficits" in digitization and public administration that could use state investment. The Greens are polling strongly ahead of September's election—not as strongly as they were a few months ago, but still good enough to be a likely contender for coalition partner. Financial Times
This edition of CEO Daily was edited by David Meyer.
