American Express Stock – The Sound and Fury of Corporate America (Signifying Nothing?)
My favorite show at the moment is watching Sen. Mitch McConnell play Big Daddy to those rebellious titans of corporate America.
Recently, the U.S. Senate minority leader gave them a tongue lashing: “My advice to the corporate CEOs of America is to stay out of politics.” Otherwise, he warned, they’d face “serious consequences.”
Ooh. Scary. It’s like the old man threatening to take away the car keys after the teenager has violated curfew.
What got under McConnell’s skin was that his favorite constituent—Big Business—protested Georgia’s controversial new voting law that Democrats allege suppresses minority voting. CEOs of Atlanta-based Delta Airlines and Coca-Cola blasted the new law as “unacceptable.” Later, Major League Baseball went even further, pulling its All-Star Game out of the state in protest.
First of all, how fabulously ironic is it that McConnell wants big business to butt out of politics? Is Citizens United v. FEC no longer the G.O.P’s most-beloved Supreme Court decision of modern times? As we all know, that case conferred “person” status to corporations, giving them the sacred right to pour money into elections and “speak” their political views.
And what does McConnell mean by “consequences” anyway? Is he threatening to join forces with Sens. Bernie Sanders and Elizabeth Warren to crusade for “UGE” corporate taxes and more regulations? And does he really intend to trash America’s favorite pastime, force people to guzzle Pepsi instead of Coke and destroy a major U.S. airline just as the travel industry is finally recovering?
Well, sort of. McConnell’s cohorts are picking up the thread and going whole hog. For instance, Georgia legislators voted to end a tax break for Delta to punish the airline for its protest. And in Texas, Lieutenant Governor Dan Patrick warned rebel companies to get in line: “Texans are fed up with corporations that don’t share our values trying to dictate public policy.” (Texas-based companies such as American Airlines, Dell Technologies and Southwest Airlines have voiced protest about Texas’ pending voting law.)
But instead of quelling America’s business leaders, these tactics seem to be galvanizing them. During the weekend of April 10, more than 100 of them held a Zoom pow-wow to discuss how corporations should respond to efforts by states to restrict voting. According to The New York Times, former American Express chief Ken Chenault and Merck CEO Ken Frazier urged executives to sign a new statement that supports voting rights.
So, who do you think will win this one—McConnell and his Republican cohorts or the big dogs of Corporate America?
As if the outcome is a mystery.
I’ve seen versions of this drama before. It reminds me of the times corporations made a big stink about the paucity of diversity in Big Law and vowed to use their power as legal consumers to fix it. Remember all the media hype in early 2019 when 177 general counsel signed a letter pledging to punish law firms that failed to present diverse slates? The signatories to that letter swelled to 250 a few months later. But a year later, Reuters reported that only two of the companies dumped law firms for their diversity failures. And now, the group, once known proudly as General Counsel for Law Firm Diversity, seems to have gone quiet.
But will this current effort be different because it’s spearheaded by the mighty CEO rather than the humble GC?
Don’t bet on it. Already, some masters of the universe are equivocating. That now famous Zoom meeting has resulted in a statement that condemns voter suppression but noticeably some prominent names that initially protested new voting restrictions didn’t add their support.
While over 100 companies signed on—among them, American Airlines, Amazon, General Motors , Google, Goldman Sachs, IBM, Netflix, Starbucks—two big names conspicuously absent are Delta and Coca-Cola. Also missing is J.P.Morgan Chase, despite a personal appeal by senior Black leaders to CEO Jamie Dimon, reports The New York Times. Other big names that abstained include Walmart and Home Depot. (Mike Bloomberg, the founder and CEO of Bloomberg, Bloomberg Industry Group’s parent company, signed the list in his own capacity.)
The signers also include a large chunk of major law firms, such as Cravath, Swaine & Moore; Kirkland & Ellis; and Paul, Weiss, Rifkind, Wharton & Garrison. But some mega firms like Jones Day and Greenberg Traurig aren’t on the list. And neither are Atlanta-based firms like Alston Bird; King & Spalding; and Kilpatrick Townsend & Stockton.
As for the statement itself, the Times reports that some companies objected to the commitment “to oppose any discriminatory legislation or measures that restrict or prevent any eligible voter from having an equal and fair opportunity to cast a ballot.” Chenault and Frazier, however, held firm.
So much hand-wringing. Is it that hard for companies to commit to oppose voter suppression? What happened to all the heartfelt corporate soul searching this past year about Black Lives Matter and social justice?
Frankly, signing a statement is just the baseline. And it’s not enough.
Like their efforts on the diversity front, corporations talk a good game. I’m not saying all the displays of outrage and concern by business leaders aren’t genuine, but in the end they’re largely toothless. If companies really want to flex their muscles, they can. If they’re serious about promoting diversity, they can fire outside firms with poor diversity track records. With maybe a few exceptions, most corporations seem reluctant to take harsh measures.
And if companies want to put the brakes on voter suppression, they can stop donations to politicians who advocate those measures. (After the Jan. 6 Capitol riots, donations to Republicans surged, despite initial corporate vows to withhold contributions.) They can move out of “business-friendly” havens like Texas and decamp to places that better fit their corporate conscience.
But we know they won’t. And I understand such bold measures might not be practical or good for their bottom line. At the end of the day, business is business. Those corporate renegades will go back to papa—and Mitch will be waiting with open arms.