Over a dozen Republican state financial officers demanded this week that a powerful business lobbying group reassess its commitment to woke capitalism amid a nationwide backlash against companies pushing leftist politics.
On Wednesday, the top financial officers for 14 states sent a letter to the Business Roundtable, an association of over 200 CEOs whose companies produce about one fourth of the nation’s GDP. The letter takes aim at the Roundtable’s 2019 decision to embrace a “stakeholder capitalism” model, wherein corporations prioritize social goals over generating profit. The financial officers argue that the shift to stakeholder capitalism gave CEOs an excuse to start wading into political matters and pushing leftist politics.
“Institutions of all kinds are being pressured to depart from their proper purpose and serve a left-wing ideology. In the case of corporations, doing so harms shareholder value. It is more important than ever to honestly state the purpose of your corporation and your role, and ‘live not by lies,’” the financial officers wrote.
The letter comes just after the five year anniversary of the Business Roundtable rolling out a new statement of purpose. Dozens of powerful CEOs pledged to make their companies revolve around a “fundamental commitment to all of our stakeholders” and rejected the Business Roundtable’s previous statement that “corporations exist principally to serve their shareholders.”
“It has become clear that this language on corporate purpose does not accurately describe the ways in which we and our fellow CEOs endeavor every day to create value for all our stakeholders, whose long-term interests are inseparable,” Business Roundtable said on August 19, 2019.
Noah Wall, the executive vice president for policy and governmental affairs of the State Financial Officers Foundation, told The Daily Wire that Business Roundtable’s adoption of stakeholder capitalism has discouraged companies from making smart business decisions, to a disastrous end.
“From our perspective, the last five years have been an utter disaster,” he said. “You’ve seen companies undertake a whole host of different types of activities that have been focused on politics rather than the bottom line, rather than providing a quality good or service.”
This activism includes incidents like Coca-Cola’s 2021 condemnation of Georgia’s election integrity law, and Bud Light’s partnership with transgender-identifying activist Dylan Mulvaney.
Will Hild, who leads the anti-woke group Consumers’ Research, said that activist CEOs used the redefinition to push their own political agenda.
“Whenever they want to push a far Left, progressive agenda, they will claim they are not doing it of their own volition, they are doing it on behalf a ‘stakeholder’ and that that’s ok because stakeholder capitalism is actually better for the shareholders,” he told The Daily Wire.
However, some businesses now appear to be retreating from politics. In recent weeks, companies like Jack Daniels and Harley-Davidson have walked backed diversity, equity, and inclusion (DEI) policies following customer pushback led by conservative activist Robby Starbuck. Other companies, like Lowe’s, have also pivoted by saying their philanthropic work will now focus on apolitical causes like disaster relief and trade education.
Even Business Roundtable members like Tractor Supply and John Deere have announced moves away from woke initiatives.
The top financial officers for Alabama, Alaska, Arizona, Idaho, Louisiana, Mississippi, Nebraska, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Utah, and Wyoming all signed on to the letter. The signatories urged all the members of Business Roundtable to reconsider their endorsement of the stakeholder capitalism approach.
“The next step is for the Business Roundtable to issue an updated document that accurately reflects the purpose of a corporation and remind people about the incredible benefits business provides society, without becoming political promoters or enforcers,” they wrote.
Hild said that businesses’s retreat from DEI has been motivated by customers speaking out against woke policies, as well as Starbucks’ “excellent activism” targeting companies that were most detached from their customer base.
He also said that conservative legal action — like Florida passing anti-woke legislation — made corporations think twice before proceeding with more politicized business decisions.
However, he said that there would still be a big battle to dismantle the DEI offices and positions that have been entrenched in so many businesses.
”These people are going to have to be chiseled out,” he said. “They’re illegitimate, they don’t belong there, they don’t have an actually legitimate function except to keep themselves employed and try to turn the company that they work into a political utility for the far Left.”
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