No sooner had Anheuser Busch lost billions by its bizarre flirtation with a trans performance artist, than Target stepped up to throw more billions down the woke-hole. Then Walmart. Then Nike. And so on. Maybelline. Citi.
What’s the matter with these corporations and the people running them?
Is not the definition of idiocy to repeat something that hasn’t worked, expecting a different result? And, what happened to the idea the goal of a corporation is to make money for shareholders?
Why so keen to dump profits?There are a number of possible explanations but personal, towering stupidity does not have to be one of them.
Admittedly, the millennial woman who hired Dylan Mulvaney to pitch Bud Light seems in her video like an unreconstructed nitwit.
But if I had to defend her, I would start by admitting this wasn’t Anheuser Busch’s first dalliance with this particular disaster. She was following some kind of playbook and was no doubt nodded along approvingly when she said, “Why don’t we do something with this kid Mulvaney?”
For, when the sheer magnitude of the losses and the viral video of Kid Rock blasting a pile of Bud Light cans with an assault-style rifle made the whole thing impossible for even the most switched-off of us to ignore, it was revealed that some of corporate America’s big names were paying off woke-ism before woke was even a familiar word.If this is your issue, here are three things to help understand it.
First, people who don’t have families to support have a lot of money to spend — trillions by one estimate. It is not irrational for business to go after a wealthy demographic.Second, making money for shareholders is not the uncontested virtue it once was.
So, it’s no good you grumbling that these idiots don’t know what they’re doing. They may be perfectly well aware of what they’re doing and sucks to be you if you don’t like it. Sure we’re losing money, but it’s in a good cause.
Seriously. That point of view, unlikely though it might sound and egregious as it undoubtedly is (if you’ve made a good faith decision to put your life savings into what seems like a sound business proposition), is actually backed by The Business Roundtable.The Business Round Table describes itself is an association of more than 200 CEOs of America’s leading companies representing every sector of the US economy making up almost a quarter of US GDP.
In 2019, it redefined its Principles of Corporate Governance — which from 1997 on, specifically endorsed shareholder primacy — to include service to “all constituents, including…. society at large.”
That’s a bit different, to say the least. But unfortunately, what these people think matters.Between them, they have their hands on $20 trillion in market capitalization. What’s more, a few of them — Blackrock, Vanguard, State Street, Berkshire Hathaway, and a few others — have their hands on most shares of publicly traded companies.
So, essentially whatever these few owner companies think and say, has a lot of influence.
And, while chasing a wealthy demographic for pure monetary advantage could be part of the story, it’s entirely possible that these people actually believe their own rhetoric.
Hard to imagine the original JP Morgan doing so, but here’s today’s JP Morgan CEO Jamie Dimon, with $450 billion in market cap himself, on the subject.
In a letter to shareholders he wrote, “In the past, boards and advisers to boards advised company CEOs to keep their heads down and stay out of the line of fire. Now the opposite may be true. If companies and CEOs do not get involved in public-policy issues, making progress on all these problems may be more difficult.”
Business getting involved with public policy? That’s un-American!
But, as Dimon is hardly a bit-player in any discussion of corporate objectives and morality, it’s worth noting he doesn’t say anything about obligations to shareholders.
Not like CNRL, for whom I briefly did some well-rewarded contract work a few years ago.
Their mission statement was a breath of fresh air in these benighted times: “To develop people to work together to create value for the Company’s shareholders by doing it right with fun and integrity.” [My emphasis added.]
Which leads to the third point, follow the money and the extension of credit.
Business runs on credit. So if you’re judged at that level to be offside by Blackrock or JP Morgan, that could affect your ability to obtain credit.
That is, businesses these days have ESG scores — Environmental Social Governance evaluations as to their conformity to acceptable ideas and practices — that some investors take very seriously. And if woke investors with trillions at their disposal want to make a point, they can.
Hard to believe, but it may be more important to keep the line of credit going, than to hand the shareholders a dividend. Or even to protect your property: One recalls Starbucks giving money to Black Lives Matter, even as BLM mobs were trashing their stores.
Why woke opinions would be popular at that level of business is harder to imagine.
A behind-closed-doors tryst with the Democrats and people who support the Democrats? It’s been suggested. The fruit of 40 years of education by leftist teachers? Almost certainly a factor.
But essentially what a few owner companies say, whyever they say it, has a lot of influence.
Combine that with CEOs of major companies being of the same political mindset — that is, open to using their company to promote a woke agenda — then you have a corporate system willing to weaponize its power and influence such that it is no longer stupidity to admire the emperor’s new clothes.