CEOs' allergy to geopolitics

Axios Finance 3 weeks ago

If CEOs are the new politicians, many of them don't seem to have thought carefully about foreign policy — particularly about working with autocratic regimes.

Why it matters: Corporate America continues to do business with the Saudi crown prince, Mohammad bin Salman, who allegedly oversaw the beheading of journalist Jamal Khashoggi, and to court business in places like China and Turkey.

American CEOs are increasingly stepping up to take positions on domestic issues like gun control, transgender rights and climate change. But when it comes to abuses that take place outside U.S. borders, they tend to fall silent — or say things they regret.

Driving the news: Uber CEO Dara Khosrowshahi took a social media beating yesterday, after telling "Axios on HBO" that the Khashoggi murder was "a mistake" and then compared it to Uber's self-driving accident in which a woman was killed. (He said after the interview that he regretted the comment.)

Khosrowshahi will talk more about his Saudi Arabia remarks to Axios at an all-hands meeting later this morning, according to a source familiar with the matter.

Uber is not alone in what looked like a soft shrug at the crime:

  • After boycotting the Saudi regime's "Davos in the Desert" investment conference in 2018, shortly after the murder, many high-profile companies and CEOs fell in line and attended the event this year.
  • While the Business Roundtable made a statement in August about the importance of social responsibility, its CEO members haven't tackled the knotty issue of profiting from business conducted in autocratic regimes.
  • Noteworthy example: BlackRock CEO Larry Fink — who has taken big public stands on gun control and corporate social responsibility — has continued to do business in Saudi Arabia since the Khashoggi murder, saying in 2018 that "everyone has their own theories" about the murder.

There are exceptions:

  • After Endeavor CEO Ari Emanuel returned $400 million of Saudi money in March, the possibility opened up that other companies would take a similar stance and treat Saudi Arabia in much the same way as they might treat a gun manufacturer.
  • That hasn't happened.

Be smart: U.S. companies are still wary of taking a stand on international issues.

  • The list of joint global coordinators for the upcoming trillion-dollar Saudi Aramco IPO includes all the big U.S. investment banks, among others.
  • The banks — Morgan Stanley, Goldman Sachs, Citigroup, and HSBC (which all declined to comment to Axios on Monday), as well as Bank of America Merrill Lynch, JPMorgan, and Credit Suisse (which didn't respond to a request for comment) — all stand to make millions of dollars in fees when the Saudi state oil company goes public.
  • While taking a moral stance may look good in the eyes of some customers and employees, CEOs ultimately have to consider business implications like their responsibility to shareholders and the potential actions of competitors. 

The bottom line: There's a long tradition in America that "politics stops at the water's edge." Insofar as CEOs are the new politicians, they seem to have adopted the same principle.

  • This is reinforced by a Trump White House that selectively refuses to take action or speak out against autocratic governments for human rights abuses, including the Khashoggi murder.
  • As JPMorgan CEO Jamie Dimon told Axios last year, regarding Saudi Arabia: "We will abide by what the American government decides, not what JPMorgan decides."

Source link
Read also:
Business Insider › Finance › 1 month ago
WeWork's CEOs have once again warned employees to brace to layoffs. The CEOs also promised that the team was working on severance packages. At the same time, the CEOs told employees it was still opening new buildings in locations worldwide and hiring...
Business Insider › 1 month ago
The average age of Fortune 500 and S&P 500 CEOs spiked in the last year, according to data from executive staffing firm Crist Kolder Associates. The overwhelming majority of CEOs are also white, though the number of CEOs of color has ticked up somewhat...
Business Insider › 2 months ago
A report from Accenture and the UN Global Compact found that the majority of 1,000 CEOs surveyed believe the business world is not doing enough with its sustainability agenda. The CEOs stressed the need for collaboration among competitors in sharing...
Business Insider › Technology › 1 month ago
Business Insider spoke with SAP's new co-CEOs, Jennifer Morgan and Christian Klein, who have replaced longtime CEO Bill McDermott. The new CEOs say that the job offer came on Wednesday, and was a surprise to even them: Klein says he didn't even pack...
Business Insider › 3 weeks ago
Hundreds of American CEOs say they have increased diversity and inclusion efforts over the last year. Nearly 800 US CEOs — from firms like JP Morgan, McKinsey, and Ford — said they've prioritized the issue among their board of directors...
BBC News › 2 months ago
Owen Carey said he had a dairy allergy but was not told his meal contained buttermilk, a coroner rules.
CNN › 2 months ago
A teenager who died after eating a birthday meal at British burger chain Byron had told staff about his allergy to dairy, but was misled into thinking his order was safe to eat, a coroner has found.
The Independent › 2 months ago
Get a full night's shut-eye without an allergy flare-up thanks to these specially designed products
BBC News › 2 months ago
Pret a Manger rolls out more comprehensive food labelling in the wake of a teenager's allergy death.
The Sun › 2 months ago
A MUM-of-two with a rare allergy almost died after she was served Pepsi Max instead of Coke. Elizabeth Perkins, 30, from Derbyshire, fell into a three-day coma after taking “less than a sip” of the diet drink. She and her two sons are allergic to...
Sign In

Sign in to follow sources and tags you love, and get personalized stories.

Continue with Google