President Joe Biden greets House Speaker Kevin McCarthy (R-Calif.) before the State of the Union address on Feb. 7, 2023. Kevin Dietsch/Getty Images
I’ve saved the question on U.S. politics (see Five Questions here) for last. I know some CEO Daily readers would prefer I avoid it altogether. Today, business has no home in either political party. The Republican right has declared war on “woke” corporations that adopt the kinds of climate and diversity policies that have become table stakes in today’s talent-driven business world—witness the woes of Disney, AB Inbev, and Target. Meanwhile, the Democratic left has turned away from business, deeming profits as dirty and favoring regulation to excess. No wonder most CEOs prefer to stay out. But politics and its byproducts can’t be ignored—any more than technology or geopolitics or climate change. Harvard’s Michael Porter was right six years ago when he wrote in Fortune that a dysfunctional political system is the single biggest threat to U.S. competitiveness. In the long run, companies can’t thrive in a country whose politics are broken.
So how to engage? Well first, encourage employees to participate and vote. Second, support politicians in the center; they need it. Any business leader who cares about the future of capitalism these days should be a raging centrist. Third, consider backing non-partisan efforts to empower the majority—like the “final five” voting used in the last election in Alaska. Most importantly, do the hard work in advance to define your company’s values—the things you are willing to stand up and fight for. If there’s one clear lesson from the problems that pummeled Disney and AB Inbev, it’s that vacillation is the worst solution. With a bruising political year ahead, companies need to know in advance where they are willing to make a stand. If you wait until the crisis comes, it’s too late.
I’m sure some readers will ask about the “No Labels” campaign to run a third-party candidate for president. On that effort, I’m inclined to agree with Bill Galston, who helped found No Labels but has since left in disagreement with the group’s plans to run a third-party candidate. The odds such an effort can succeed are minimal; the odds that it throws the election to the passionate minority are not.
Democratic Sen. Mark Warner of Virginia, one of the rare centrists in Congress, as well as an experienced panel of political experts, will join the Fortune CEO Initiative in D.C. Oct. 3 to give their advice on how companies should navigate these shoals. You can get more information on the initiative here.
CEO Daily will be off Monday for Labor Day in the U.S. We’ll be back in your inbox on Tuesday.
More news below.
A shot in the Arm
A trio of anticipated listings—Arm, Klaviyo, and Instacart—could jumpstart the sluggish IPO market. Just 14% of companies that debuted in the boom year of 2021 are still trading above their offer price. Firms considering a debut are looking to next month’s IPO by ARM, a chip design firm, with one private equity executive suggesting that a 20% post-debut jump would “accelerate the pace of new issues.” Fortune
Between the U.S. and China
Anwar Ibrahim, prime minister of Malaysia, isn’t worried about the Southeast Asian country getting caught in the crossfire between Washington and Beijing. In an interview with Fortune, Anwar said he tells Americans: “Look, [China is] an important neighbor. It’s not a zero-sum game as far as we’re concerned.” The Malaysian prime minister won a $40 billion investment commitment from China during a recent state visit that will go towards sectors like auto manufacturing and petrochemicals. Fortune
Netflix tries a different play
Netflix is sitting out the expensive fight to air live games by taking a different approach to sports programming: Making documentary series on athletes instead. Sports associations are eager to cooperate: Nielsen credits Netflix’s “Drive to Survive” for bumping up viewership of live Formula 1 races. Other companies are paying a hefty price to air the actual games, with Amazon reportedly losing hundreds of millions of dollars streaming Thursday Night Football. Fortune
AROUND THE WATERCOOLER
The Fed’s favorite inflation gauge rose last month—here’s why some economists say it’s misleading and won’t lead to more interest rate hikes by Will Daniel
Legendary retail CEO Hubert Joly’s playbook for navigating the culture wars by Hubert Joly
An immigrant founder lived on $3 a day before selling a startup for millions. Then he lost it all in the dotcom crash and had to build it back by Jane Thier
Elon Musk’s X now wants your biometric data, as well as your job and education history, for ‘safety, security, and identification purposes’ by Chloe Taylor
Morgan Stanley analyst predicts S&P 500 could leap another 11% this year, boosted by gains in ‘Magnificent Seven’ stocks by Eleanor Pringle
‘I cold emailed LVMH boss and he hired me’: How Nespresso’s U.K. CEO got her foot through the door of the notoriously hard-to-break luxury industry by Orianna Rosa Royle
This edition of CEO Daily was curated by Nicholas Gordon.