Also: Basel III Endgame, online predators, Warren's truce
Good morning.
CEO Daily readers occasionally ask me whether the stakeholder capitalism model is relevant in China. It is–but with a twist. There is only one stakeholder that matters.
That was evident yesterday in my conversation with Pansy Ho, daughter of the late Stanley Ho and chair and executive director of MGM China. Ho and her fellow gambling moguls faced a mandate last year from the government: reduce Macau’s dependence on gaming from 70%-80% of GDP today to 50% a decade from now. In negotiations to renew their licenses, they were required to collectively commit $15 billion over the decade to fund that transition. Here’s how Ho described it:
“The government last year was going through what they call the tender process, which we all had to take very seriously. I had to come and live here (Macau) for six months in order to prepare. We all thought in the beginning it just meant filling out a form. But they said: ‘No no…We want you to explain and express exactly how you are going to fulfill your commitment.’ What the government has made us do is to practically write into the calendar on a monthly and even weekly basis, how we are going to attract people here.”
For MGM, Ho says that effort will include concerts like the Bruno Mars event she is hosting next year, as well as art. “We are going to build out our own museum. We have dedicated 66,000 square meters of space to it.” I asked Ho if she expected gaming income to go down while other activities went up. “No,” she responded quickly. “We want gaming to go up!”
Ho’s comments were an interesting echo of what I heard last week from Abu Dhabi officials, who are undertaking an equally ambitious effort to wean themselves from oil profits. It will be interesting to watch how both jurisdictions fare.
The conversation with Ho was part of Fortune Brainstorm Design, which gathers design executives from around the world. This year, we focused on the transformational effects of AI. PepsiCo’s Mauro Porcini captured the zeitgeist of the event with this description of the designer’s challenge:
“Designers are obsessed with creating something meaningful for people. Something that creates value…In this world we live in, this global world, this world that is digital…the traditional barriers to entry in business are gone. And so either you create something extraordinary for people, or somebody else will do it on your behalf… Your best competitive advantage is human centricity, creating value for people. And design is all about these things.”
You can read more about the conference here. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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Bank bosses are worried
Wall Street’s top bank bosses have warned Congress that proposed regulations (known as Basel III Endgame) risk hurting the U.S. economy. The CEOs of JPMorgan Chase, Citigroup, Goldman Sachs, and five other powerful firms argued that the stricter measures would hurt lending at a time when the economy needs support, as well as unintentionally hurt business owners, pensioners, and mortgage customers. “The rule would have predictable and harmful outcomes to the economy, markets, business of all sizes, and American households,” JPMorgan Chase CEO Jamie Dimon told lawmakers. CNBC
Meta's woes
New Mexico’s attorney general has accused Facebook parent Meta of serving underage users sexually explicit content, allowing them to be contacted by predators, and facilitating the sharing and selling of child pornography in a lawsuit on Wednesday. A Meta spokesperson said online predators "are determined predators" and highlighted the company's ongoing efforts to stop them. NBC News
Elizabeth Warren's truce
The U.S. senator and creator of the Consumer Financial Protection Bureau, Elizabeth Warren, doesn’t see eye to eye with powerful banking executives often. But when it comes to subjecting cryptocurrency to the same regulatory rigor that banks are held to, they’re on the same page. “I am not usually holding hands with the CEOs of multibillion-dollar banks. But this is a matter of national security,” Warren said. Fortune
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CEOs building for resiliency amid disruption CEOs surveyed indicate that maintaining growth is one of the biggest challenges they face today. Concerns about geopolitical instability, inflation, other sources of financial/market instability, and labor/skills shortage continue while regulation surfaces as a top concern for CEOs. Read here.
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