01 Apr 2021 Woke Companies Misuse Equity Agenda for Own Gain
“Stakeholder capitalism” upends the traditional fiduciary responsibilities of the business community by placing the want of special interests on the same level as the need for a company to turn a profit.
Yet the corporate community – egged on by the radical left – has jumped on board the stakeholder bandwagon with enthusiasm.
One CEO who appears to be leading the charge is Brian Moynihan of Bank of America. In a Townhall commentary, Free Enterprise Project Deputy Director Scott Shepard reports how Moynihan “has established a set of metrics by which, he boasts, investors and the public would be able to gauge, and companies should be required to report, the efficacy of the conversion to stakeholder capitalism.”
Scott notes that Moynihan believes his woke measurements are “necessary to bring diversity and equity, and to save the environment.”
Yet Scott explains that the embrace of stakeholder capitalism is actually quite selfish:
In reality though, these metrics will merely instantiate his – and his CEO pals’ – own personal policy preferences and personal wealth-preservation strategies while asking no questions that he or his World Economic Forum colleagues would find personally troublesome.
[T]he metrics would require reporting of diversity by sex, age and other characteristics, but not reporting about diversity by – or even about minimum protections against discrimination on the basis of – viewpoint or political participation. And there are no reporting requirements about companies’ continued commitment to merit-based decision making, measures to ensure that surface-characteristic quotas are not established, or other barriers against active discrimination to achieve arbitrary numerical metrics.
Likewise, the metrics would require reporting about greenhouse gas emissions, but would not require reporting on comparative analyses of the emissions being created in jurisdictions and by corporations not amenable to these metrics, or about the creation and actual or potential effects of fuel substitutes. But overfocusing on greenhouse-gas production by western firms and polities ignores the fact that reductions in the west will be meaningless if they are swamped, as they are being swamped, by production increases elsewhere in the world. And they ignore the very real environmental concerns and reliability (and therefore health and safety risks, as illustrated by the cold snap that hobbled Texas this winter) that arise from the use of “green” alternatives.
Needless to say, there are no metrics that make any demands on CEOs or other executives like Moynihan and his friends themselves.
There are no requirements to report whether the companies have ridded themselves of all company jets, or refused to hire or retain any employees who live in homes larger than 1,000 square feet per person, or personally account for something more than some bare minimum of carbon production. Nor are there any metrics that would require companies to account for all the money that they take from government agencies in all forms; and what efforts they make to return such funds, with appropriate interest, to those government agencies; and what measures they take to avoid any contentious political positions while they remain in hawk to taxpayers.
BoA in particular would find those last questions particularly galling – and so of course they don’t appear anywhere in Moynihan’s grand plans.
This process of picking winners and losers is a house of cards. It’s easy to see the cracks in the façade, as Scott explains:
Stakeholder capitalism is just a front for Moynihan and his friends to make political demands throughout the corporate world and to protect themselves while pretending to work “for all.” Really learning what everyone wants would both show that stakeholder capitalism is incoherent and make it much harder to just do whatever they want while ascribing their actions to the Rousseauvian “general will” of stakeholders.
And, as politics affects bottom lines, the bigger companies – the same ones embracing stakeholder capitalism – will likely be eligible for bailouts while their smaller competitors and erstwhile startups suffer disproportionately.
In this instance, equity falls by the wayside.
At Bank of America’s annual shareholder meetings, FEP has challenged Moynihan’s political agenda on issues including guns and abortion.
Read Scott’s full commentary – “BoA’s Moynihan’s ‘Shareholder Capitalism’ Metrics Reveal the Ruse” – at the Townhall website by clicking here.