Chief executives have enough to worry about running complex businesses in a challenging environment and a prospective recession to boot without having to deal with political figures attacking them as woke CEOs for their focus on diversity and sustainability, a group of them said during a Fortune conference in Florida this week.
That so-called stakeholder capitalism they advocate is simply corporations focusing on doing well by doing good and was the focus of a panel at Fortunes The CEO Initiative summit in Palm Beach, Fla. on Wednesday. The states governor, Ron DeSantis, has repeatedly taken aim at chiefs looking to hit ESG (environmental, social, and governance) goals, one of many Republican politicians taking aim at corporate America focused on social and environmental matters. In some states, political figures have gone as far as threaten to ban investments by state funds in companies focused on ESG.
But the CEOs at the conference say stakeholder capitalism merely reflects capitalisms ability to revitalize itself and ensure its future. Its also a matter of talent attraction and being in tune with what workers, investors, and other stakeholders expect of companies in this day and age.
Its very important to listen to them (employees and other stakeholders) and understand what their expectations are because they truly are wanting to make better a company they want to work for, to make an impact on the environment and on the communities where they are participating, said Chano Fernandez, co-CEO of Workday. There is a great correlation between purpose and stakeholder capitalism and good business.
The CEO of Schnitzer Steel Industries, Tamara Lundgren, said there was nothing new in the fundamental idea of stakeholder capitalism, and that many companies have long understood the value of doing well by their employees and society at large as being beneficial to business, but that it should remain at the forefront of a corporations priorities.
Penny Pennington, managing partner of Edward Jones, said that the first thing prospective employees ask about when considering job offers is the financial firms annual impact report. At the same time, Pennington said, it was important for a company to be focused on what social problem or issue to tackle and home in on those that are directly connected to its business, rather than try to address all of societys ills. In Edward Jones case, Pennington said, it was financial security and wealth inequality.
So financial security is our lane. And if were long-term in our view, that means equity and access to financial education and advice is absolutely central to our longevity. So it matters. Social mobility has to matter to us, Pennington said.
As for Moynihan, he said whatever the bank does will earn it critics. Bank of America invests in fossil fuel companies, but it also invests in renewable energy companies, he noted as one example. Ultimately, Moynihan said, capitalism has to be flexible to respond to the societal concerns of the erawhatever labels critics want to lob at CEOsto survive and remain what the delegates on the panel called the best economic system ever invented.
If we dont do that, we can lose, Moynihan said. Capitalism works. It may be screwball, it may be hard, and it may go in all different directions, but it works.
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