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March 30, 2023

Good morning,

Peter Vanham here, back from paternity leave, filling in for Alan.

The Swiss banking world woke up to another “surprise” yesterday, as former UBS CEO Sergio Ermotti returned to the top spot he held until 2020, replacing the Dutchman Ralph Hamers. As CEO of the newly formed UBS-Crédit Suisse megabank, Ermotti will oversee the merger that came into existence following the near bankruptcy of CS earlier this month.

The return of the Italian-speaking Swiss is “a good and necessary” move, Markus Diem Meier, editor-in-chief of the Swiss financial weekly Handelszeitung told me on the phone from Zurich yesterday. “It’s difficult to have the CEO and chairman be foreigners who don’t know the country,” he said, referring to the Dutchman Ralph Hamers and the Irishman Colm Kelleher, who led UBS until now. 

However, what particularly struck me in the announcement was the emphasis the bank put on the importance of its “stakeholders” in the move.

“Our full attention will be on delivering the best possible outcome for our clients, our employees, our shareholders, and the Swiss government,” Ermotti said, after vowing to act in “the interest of all stakeholders.” Hamers did the same, saying he was stepping aside “in the interests of the new combined entity and its stakeholders.”

According to Diem Meier, however, the only stakeholder that really mattered in the CEO switch was the Swiss government (and the people it represented). “Despite not speaking Swiss German better than Hamers, Ermotti speaks the language of the country,” he told me. “He knows and is able to calm down the lawmakers in Bern, who are already looking into making new laws on the financial sector.”

This very Swiss tale is telling of a broader trend that is playing out around the world. Government is reclaiming its role as the player who decides the winners and losers in the economy through regulation, industrial policy, and emergency measures. A commitment to “stakeholderism” may really be a way for executives to keep the rise of this “statism”–the new, more powerful role of the state in the economy–in check.

In Switzerland, the government reluctantly and grudgingly brokered the forced marriage of its too-big-to-fail banks. But elsewhere, including in the EU and the U.S., political leaders are all too eager to re-assert control. It doesn’t make stakeholder capitalism less relevant, but it sure puts it in a different light. 

More news below.

Peter Vanham




No ethics in A.I.

As tech giants race to dominate the A.I. market, companies such as Google, Microsoft, Amazon, Meta, and Twitter are reportedly downsizing their responsible A.I. teams in the face of the economic downturn that has forced over 300,000 employee layoffs. These decisions have been criticized by a number of tech leaders and public figures, who are calling for a six-month pause on advanced A.I. research to carefully consider potential consequences before products are rolled out. Fortune

European political ads ban

Meta is considering a ban on all political advertising across its platforms in Europe due to concerns that EU regulations on online campaigning will be difficult to comply with. The new laws, expected to take effect next year, will require internet companies to disclose more information about the political groups behind online campaigns and the users they are targeting. A final decision will be made once the EU settles on a definition of what constitutes a political ad for its new regulations. Financial Times

They’re watching you

ResumeBuilder.com's survey of 1,000 business leaders at remote or hybrid companies revealed that most monitor their employees, with over a third requiring live video feeds. As a result, three out of four companies have fired employees due to monitoring software, while 70% have had employees quit over their refusal to be monitored. Despite 97% of companies believing monitoring increases productivity, it can lead to resentment and mistrust, causing unapproved breaks and slower work. Fortune



The four corners of stakeholder strategy by Matt McDonald

How a major chemical company is moving into the future while reckoning with a dangerous legacy by Fortune Editors

Months after backing an activist campaign against Bob Iger’s Disney, Marvel Entertainment chairman Ike Perlmutter is out by Prarthana Prakash

As Starbucks CEO Howard Schultz faces off with Bernie Sanders he insists: ‘We do nothing nefarious. We put our people first’ by Dee-Ann Durbin and The Associated Press

Jason Lee left DailyPay, the company he co-founded, after investors rejected a $2 billion sale to Chime. Now he’s back with fintech startup Salt Labs which has raised $10 million by Luisa Beltran

This edition of CEO Daily was edited by Jackson Fordyce. 

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