Also: Musk vs. Zuckerberg, Country Garden, and union troubles
Good morning.
One of the great roller coaster rides of the last 10 years has been watching U.S.-based CEOs wrestle with how to respond to controversial social issues. Over a decade ago, most of them would have hidden under their desks before commenting on something like police brutality or transgender access to public bathrooms. But that began to change around 2014, and the pandemic hypercharged the change. The trend peaked with the police killing of George Floyd in 2020, when almost every big-company CEO felt compelled to issue a public comment.
Today, the pendulum has swung back—or rather, been pushed back by politicians attacking “woke” corporations and seeking to stop CEO activism. In the face of that political pushback, many large companies have developed new processes and mechanisms to help them decide when to speak out and when to stay quiet. None are eager to find themselves in the fix that former Disney CEO Bob Chapek encountered in Florida, or to come under attack from the governors and attorneys general of red states trying to score political points.
But while many companies and CEOs are retreating, the public, apparently, is not. At least that’s the finding of a new survey out this morning from the folks at Weber Shandwick. They found that the vast majority of consumers still expect companies to take public positions on critical social issues, including human rights (82%), climate change (73%), racism (72%) and gun violence (70%). Some 65% of employees say companies have a responsibility to speak up even if an issue is sensitive or controversial. And here’s the most interest part of that last number: it has gone up seven percentage points since Weber Shandwick’s last survey in December. Political pushback may be giving CEOs second thoughts, but for employees, it appears to be having the opposite effect.
“The message here is that despite all the anti-woke rhetoric and all the noise, companies still have a measured license to lead when it comes to social issues,” Weber Shandwick’s chief public affairs officer Pam Jenkins told me yesterday. “Today, you cannot say nothing. Companies have to find a way to depoliticize the conversation, but stay in the conversation.”
More news below. And I’ll be taking off next week off to decompress. My colleague Peter Vanham will write the newsletter.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Key person risk
The cage match between Meta CEO Mark Zuckerberg and Tesla CEO Elon Musk highlights a key corporate governance problem for companies led by superstar executives: That companies can’t stop them from doing something reckless. Both companies cite their CEOs as key to their business success, to the point where Meta expects to spend $14 million on Zuckerberg’s personal security this year. But there’s little room for repercussions from the board or shareholders, thanks to the outsized voting power of Zuckerberg and Musk’s shares. Fortune
Down to a dollar
Country Garden Holdings, one of China’s largest property developers, warned in a late Thursday exchange filing that it could report as much as a $7.6 billion loss in the first half of the year. The warning helped send its shares below one Hong Kong dollar ($0.13) for the first time on Friday. Once seen as a model developer and a possible survivor of China’s property crisis, Country Garden missed a $22.5 million debt payment earlier this week, setting up a potential default. South China Morning Post
Union troubles
Ford and General Motors led declines on the S&P 500 on Thursday due to worries about upcoming union negotiations. The United Auto Workers union is demanding a 46% pay increase over the next four years, a shorter work week, and similar protections for those working in EV factories. The companies estimate that fulfilling the union’s demands would add up to $80 billion in additional labor costs. Bloomberg
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Back-to-school spending in the face of inflation Consumers are reassessing their spending and pulling back on nonessentials like tech and apparel, according to Deloitte’s 16th annual back-to-school survey. However, nearly six in 10 parents say they would be willing to splurge for the right reasons. How might this impact retailers? Explore insights here.
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