Memo to CEOs: Quit Acting Like Bureaucrats
Last week, Ralph Nader took a page out of Carl Icahn’s playbook and sent a letter to Apple CEO Tim Cook. The long-time consumer advocate-turned shareholder activist urged Cook to use Apple’s enormous cash horde to provide “living wages” for Chinese workers instead of “stock buybacks for millionaires.”
Never mind that the $130 billion stock repurchase Nader refers to has already been committed to shareholders and that the Chinese workers in question don’t actually work for Apple, they work for contract manufacturer Jabil.
It’s got to be hard for a CEO to turn his back on a letter that begins with this pointed reference to Apple’s iPhone packaging, “‘Designed by Apple in California’ has a nicer ring to it than ‘Assembled by workers paid about a dollar per hour, working 11hour shifts, and sleeping eight to a room in the Jabil Circuit corporate dormitories in Wuxi, China,'" writes Nader.
What to do with all that cash is no small matter and while I’m sure we would all love to see workers make living wages, a plan is a plan and that ship has sailed. End of story. But it’s by no means the end of the problem CEOs of publicly traded companies face: an ever-growing list of lobbyists and agitators to answer to.
A few months back it was civil rights activist Jesse Jackson shaking down Silicon Valley companies with deep pockets over a preponderance of white male engineers and executives. Wouldn’t you love to know how many millions in donations and contracts Jackson managed to haul in from the likes of Apple, Google, Facebook and HP?
More and more, politically correct CEOs kowtow to lobbyists and special interest groups rather than risk being labeled a racist, gender biased, tone-deaf to worker conditions, insensitive to the LGBT community, unsupportive of Millennials’ needs for workplace flexibility, uncommitted to diversity and inclusion, or uncaring about the environment or, God forbid, a manmade global climate change nonbeliever.
Big corporations used to do all the lobbying. Maybe that’s where all the self-serving special interest groups learned how to lobby, threaten, bully and extort government agencies, educational institutions, non-profits, small businesses, and now, corporate America so effectively. It doesn’t get any more ironic than that.
What I’m wondering is when did big-company CEOs paid countless millions to make tough strategic decisions on a daily basis become such cowering wimps that allow themselves to be led around by the collar and made to mimic talking points about discrimination, income inequality, global warming and dozens of other causes?
Don’t even get me started on the role activist investors have played in all the ill-advised corporate split ups and spin offs and tax inversion schemes of late.
When corporate executives start to behave like government bureaucrats -- reacting to self-serving special interest groups, spouting politically correct rhetoric, throwing away money that belongs to stakeholders, and making politically expedient strategic decisions to cover their own behinds -- we’re all in trouble.
Look, CEOs are trained to weigh all relevant factors in making the right decision on behalf of their stakeholders, but let’s be clear, that’s exactly who they’re committed to serve, their stakeholders. And that means their customers, employees and shareholders. Of course the greater good matters but since when do special interest groups serve the greater good? They don’t. They serve themselves.
There’s only one way for CEOs to handle lobbyists and agitators: If they make a good point, if there’s something new to consider, if it might inform a better decision on behalf of your real stakeholders, then by all means, meet with them, listen to what they have to say, and then make the right call. If they don’t meet those specific criteria, they don’t deserve a response. Period.