Is Our CEOs Learning?

No, that headline is not a typo. It’s a callback to the days early in the century when we on the right spent a lot of time defending a president whose facility with the English language was, on the most generous evaluation, intermittent. (His repayment for all of that support was a kick in the teeth, of course, once he and his family discovered that their unofficial patent of nobility had been canceled. But that’s a column for a different time, and venue.)

Scott Shepard

Scott Shepard

However phrased, it is this week the central question for the business world: Are American CEOs sufficiently in touch with reality, and sufficiently skilled at reasonable prognostication and risk analysis, to recognize that the dangers of wokeism – either real or of the virtue-signaling variety – are now demonstrably far higher than they have been at any time since the great corporate awokening began with the Business Roundtable’s rhetorical embrace of stakeholder capitalism in 2019?

(This was followed, of course, by Corporate America’s ill-considered bear hug for BLM’s “fiery but mostly peaceful protests” and the merit-denying spoils system of racial equity; all while fighting against sensible border control, election integrity laws and other extremely popular, middle-of-the-road measures.)

Last week’s elections and the debacle of the COP26 global-warming summit revealed the profound business risks of following further down the path of the hard left.

The meaning of the election results could hardly be clearer. In recently very-blue-indeed New Jersey and Virginia the electorate shifted right by about 12-14 points in a single year. There were many motivations for this shift, including anger at having elected someone who pretended to be Jack Kennedy when he was medicated enough to campaign at all, but whose handlers have led him to govern as George McGovern.

But voters were also stamping “return to sender” on all of the woke plans of the hard left.

In Virginia, the biggest issue was the infiltration of wokeism and its effects in the commonwealth’s public schools. School boards lied to and condescended to parents about whether critical race theory (CRT) was being taught. Parents were told that, gosh, there’s no CRT being taught here, just “racial equity,” as though using the word race would terrify parents into refusing to allow themselves to recognize that racial equity – the division of all wealth and power as racial spoils, without regard to personal effort, sacrifice or merit – is the product of critical race theory and only makes sense if it also fully embraces notions of the intergenerational, irradicable guilt of white people now for things that other people’s ancestors of similar skin tone did in the past.

In other words, racial equity is the devil’s spawn of CRT and flat-out anti-white racism. While the hacks at MSNBC are free to pretend that CRT is a myth, corporate leaders most certainly are not. (Have you noticed the frequency of this new move: that anything the left doesn’t like is a “myth,” regardless of how obviously true it is? And that definitely true things that reveal the insanity of hard-left positions are labeled “misinformation” in Silicon Valley? It’s been said before, y’all, but 1984 was not an instruction manual. Not for people who aren’t evil.)

Corporate leaders are no longer free to pretend because the verdict of the voters matters intensely to them. If this 13ish-point shift holds up through 2024, the government that will then regulate these companies will look very, very different than the current one. And it will be motivated – in fact, it will be directed by the voters – to do what’s required to strip corporate leaders of their ability to play World Economic Forum-regarding, American interest-disdaining, self-appointed Masters of the Universe (Mo/tU).

Business leaders have never in their lives faced a situation in which moderates and conservatives are electing people to constrain them. But they’ve played things so badly that this appears to be a pretty likely looming outcome.

The too-big-to-fail banks should certainly expect legislative efforts to require that too-big-to-fail also means too-big-to-discriminate, against any employees or potential clients or investors, no matter how “non-diverse,” and regardless of whether the banks’ executives disapprove of the industry they’re in or the causes they support. And then why not similar nondiscrimination laws for all publicly traded companies? Meanwhile, legislation has already been proposed to force executives to carry the burden of proof that their social-justice initiatives are also, objectively and concretely, in the financial best interest of their companies.

And, perhaps most worrisome of all for these Mo/tUs: What about private-investment disclosure requirements for CEOs and boards charged with running publicly traded companies? For instance, one of the great concerns is that such “leaders” are forcing shareholder-company divestment from carbon-based energy because then private equity will be able to snap up those opportunities. And of course the Mo/tUs are the folks who have the dosh to make private-equity investments. But that would, under clear current law, render them personally liable for all of their self-dealing, and might well carry punitive damages as well. Legislation that requires CEOs to disclose their private investment activities to make sure that their personal-policy-preference self-dealing doesn’t also include financial-interest self-dealing seems like a common-sense pro-disclosure reform, no? Exactly what the SEC, acting as watchdog for shareholders, ought to be doing, I should think.

This last consideration – environmental hogwash covering private gain – brings us to COP26. Tens of thousands of supposed green activists burned huge amounts of carbon to attend, but the countries whose support is predicate to any non-pretextual carbon agreements – China, Russia and India – didn’t bother to go at all. Meanwhile, the very carbon plans that the climate cranks endorse have worked out so badly that the COP26 meetings themselves are being fired by coal power (because so-called renewables just are not reliable).

Companies that go hard for politicized carbon-neutrality targets will cost themselves greatly, even if only as a result of stupid – rather than self-dealing – management. And voters have signaled, just as the public has signaled, in poll after poll, that they are not willing to freeze in the dark so the Mo/tUs can get to Davos and a COP every year to demand that we further immiserate ourselves so that they can live high.

So, CEOs: Are you learning yet? Or will voters have to bring the electoral equivalent of what my grandfather always called the board of education?

His, I should mention, was rather less woke than Loudoun County’s. It was more of the sort that Virginia voters wielded last week. And it sure did wake one up.

Scott Shepard is a fellow at the National Center for Public Policy Research and Director of its Free Enterprise Project. This was first published at Townhall Finance.

The National Center for Public Policy Research is a communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s public policy problems. We believe that the principles of a free market, individual liberty and personal responsibility provide the greatest hope for meeting the challenges facing America in the 21st century.