27 Jan 2022 Walgreens’s Deceit Exposed in Shareholder Meeting
If Walgreens Honestly Prioritizes All Stakeholders, It Would Convert to a Public Benefit Corporation
Chicago, IL – Walgreens investors learned today that the company’s stated commitment to all of its stakeholders, as outlined in the Business Roundtable’s Statement of the Purpose of a Corporation, was a public-relations effort rather than a real change in stance.
The National Center for Public Policy Research presented a shareholder proposal at Walgreens’s annual meeting today, testing whether Walgreens’s asserted commitment to stakeholder capitalism would lead it toward becoming a public benefit corporation (PBC) – the only legal way for a company to move away from its primary duty to shareholders.
“Stakeholder capitalism is a fraud. Either it’s the same old – legally required, totally effective – shareholder capitalism with a new PR team, or it’s CEOs trying to become unelected economic czars,” said Scott Shepard, director of the National Center’s Free Enterprise Project (FEP), who presented the proposal at today’s meeting. “Either way, Walgreens is a fine company that should focus on efficiently and profitably providing medications and services to virtually the whole country instead of indulging the ever-inflating egos of misled corporate executives.”
At the meeting, Shepard introduced his proposal saying, in part:
The Business Roundtable, a social club for wealthy CEOs, declared in 2019 that it had redefined the corporate purpose. It said the purpose had shifted from the traditional and legally required rule of shareholder primacy to a new theory of stakeholder capitalism. Under it, CEOs and boards of directors would supposedly run the company for the benefit of all stakeholders, meaning “for everyone.”
The problem: it’s impossible for company executives, at Walgreens or elsewhere, to make decisions that legitimately capture all stakeholder interests, since stakeholders have divergent interests. Just consider how deep social, political and economic divisions are these days.
Even if there were, that’s not what CEOs and companies even attempt to do. They do not poll all stakeholders, feed the results into some objective decision process, and then enact the result.
Consider BlackRock CEO Larry Fink’s arrogant and irresponsible letter to CEOs just last week. In it, he admitted that “[d]elivering on the competing interests of a company’s many divergent stakeholders is not easy…. In this polarized world, CEOs will invariably have one set of stakeholders demanding that we do one thing, while another set of stakeholders demand that we do just the opposite.”
How does Larry decide? He listens to the stakeholders who demand – conveniently – exactly what he wanted to do in the first place.
But that isn’t stakeholder capitalism. It isn’t capitalism at all. It is an insurrection by c-suites and CEOs against their bosses – the ultimate investors.
“The Business Roundtable is the American heart of attempted insurrection by the CEO class,” said Shepard after the meeting. “To stand with the Roundtable is to stand with BlackRock’s Larry Fink and Bank of America’s Brian Moynihan against our country’s free market capitalism and free society. Walgreens is still trying to have it both ways, but that’s just not possible anymore.”
The National Center’s proposal can be found on pages 103-105 in the Walgreens 2022 Proxy Statement. Shepard’s supporting statement can be read here and heard here.
Today’s meeting marks the third time FEP has participated in a shareholder meeting in 2022. To schedule an interview with a member of the Free Enterprise Project on this or other issues, contact Judy Kent at (703) 477-7476.
Launched in 2007, the National Center’s Free Enterprise Project focuses on shareholder activism and the confluence of big government and big business. Over the past four years alone, FEP representatives have participated in over 100 shareholder meetings – advancing free-market ideals about health care, energy, taxes, subsidies, regulations, religious freedom, food policies, media bias, gun rights, workers’ rights and other important public policy issues. As the leading voice for conservative-minded investors, it annually files more than 90 percent of all right-of-center shareholder resolutions. Dozens of liberal organizations, however, annually file more than 95 percent of all policy-oriented shareholder resolutions and continue to exert undue influence over corporate America.
FEP activity has been covered by media outlets including the New York Times, Washington Post, USA Today, Variety, the Associated Press, Bloomberg, Drudge Report, Business Insider, National Public Radio and SiriusXM. FEP’s work is prominently featured in Stephen Soukup’s new book The Dictatorship of Woke Capital: How Political Correctness Captured Big Business (Encounter Books) and Kimberley Strassel’s 2016 book The Intimidation Game: How the Left is Silencing Free Speech (Hachette Book Group).
The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 60,000 active recent contributors.
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