Two polls of business leaders released this week captured conflicting visions of our economic future.
On Wednesday, a Conference Board survey showed CEO confidence had fallen “deeper into negative territory than at any time since the start of the pandemic,” as Fortune wrote general manager Alan Murray. The following day, PwC released its Business Risk Management 2022 report. It revealed that 83% of senior executives foresee growth, while “only 30% see recession as a serious risk”.
Many factors – the slightest difference in timing, the way the questions were phrased – can explain the discrepancy. (It should also be noted that the PwC survey does not include CEOs.) But the mismatched mood checks also reflect the conflicting economic signals that executives, analysts, and economists deal with, not to mention the challenge facing corporate boards. Guess who will share the blame if companies react to today’s indicators with too much or too little confidence?
Kathryn Kaminsky, who heads PwC’s Trust Services business, says the ostensibly unexpected optimism in her firm’s new report should come as no surprise: Leaders manage what’s under their control, she says. “They can’t control inflation, they can’t control whether a recession comes or not, but what they can control is their own business strategy, and growth should be an important part of their strategy. “
Leaders are also more nimble than they were before the pandemic, which has given them the confidence to make changes and move forward, she adds, saying, “They won’t let the outside world and the threat of what is to come slow them down. “In this context, she adds, the council’s job remains to ask the tough questions, drawing on their experiences and their ‘muscle memory’ of past recessions, to better test ambitious ideas.
Jeffrey Sonnenfeld, professor of management at Yale University, has a more direct message for corporate boards: Now is not the time to be a wet blanket.
A board often sees itself “as a countervailing force,” says Sonnenfeld, but trustees are often too conservative, “sitting with folded arms and protruding lower lip.” This has a chilling effect “on a CEO’s entrepreneurial enthusiasm,” he adds.
Externally, board members will say they are primarily concerned with protecting investors and other stakeholders, and monitoring the company’s impact on society, he continued; but in private they are motivated to protect their own reputation, “and excessive caution seems to protect them more than excessive zeal”. Sonnenfeld instead calls for careful risk-taking.
Both suggestions are reasonable in an economy buoyed by rising stock prices and low unemployment, but marred by an abundance of recession fears, geopolitical crises, droughts, and now of them virus. Directors may need to steer overly cautious CEOs away from overly defensive strategies one day and control greed and ambition the next. The only “bad” position might be one that is too static.
“Like baseball umpires or exam proctors, they play a valuable role in helping to enforce the rules and prevent cheating. But they don’t hit home runs and get A’s on their exams.
—Steven Givens, a Tokyo-based lawyer, in an op-ed for Nikkei Asia on the limited power of corporate boards.
On today’s agenda
👓 Read: In an essay for Fortune Last May, Melissa Daimler, former senior vice president of WeWork, described the corporate culture that could have saved the coworking company. Daimler’s piece recently made the rounds again after the New York Times reported that Andreessen Horowitz is supporting Adam Neumann, the notorious shoe-averse and tax-irresponsible co-founder of WeWork, in his second act.
📻Listen: Angela Duckworth, the social psychologist known for her courage, explains why she is leaving her role as CEO at a non-profit organization she founded in the latest episode of No stupid questions. She also sparks an insightful discussion about “the hard work of leadership” and who is cut out for a CEO role.
📖Bookmark: Talal Rafi, a Deloitte consultant based in Sri Lanka, makes a factual and succinct argument for having sustainability experts on corporate boards in this blog post from the London School of Economics.
Beyond the Business Case of Adding Women to Boards
When a few European countries set quotas for women on company boards years ago, they created ideal conditions for curious researchers.
Take the example of a new study by scholars from Harvard and the University of Bath that measured the impact of gender quotas in Italy by comparing years of annual reports from Italian companies with those from Greece. neighboring country, where there are no quotas within the boards of directors.
They found that the addition of women to the boards of Italian companies was linked to a 50% increase in attention to issues that support gender equality, when there was no change in Greek companies, Fortune Reporting by broadsheet writer Emma Hinchliffe.
Italian companies “have started to discuss issues such as paid leave, childcare and the gender pay gap more frequently”, she explains, suggesting that when women are represented at the top, it there are positive downstream effects for all. Read the full story here.
on board/on board
All the Chosen Birds Anne Freeman, former vice president of Nike North America, to its board of directors. Freeman was previously known as Ann Hebert, the veteran Nike executive who quit after Bloomberg revealed her teenage son ran a dodgy sneaker resale business. Joanne Crevoiserat, CEO of Tapestry, operator of luxury brands, has joined the board of directors of General Motors. With her arrival, GM’s board of directors has six male directors and six female directors, compared to seven women and six men. (Meg Whitmanformer CEO of Hewlett-Packard, and Jane Mendilloformer CEO of the Harvard Management Company, recently left the board.) Emilie Arel, CEO of Casper Sleep, has been named to Macy’s board of directors. The target matters now Grace Pumaformer COO of PepsiCo, among its directors. Lip Bu Tan, executive chairman of Cadence Design Systems, was elected to serve on Intel’s board of directors. JetBlue named sustainability expert Nik Mittal to its board of directors. Mittal is chairman and co-founder of the Molecule Ventures fund focused on climate change.
-The three largest economies in the world are all struggling with extreme heat
-It’s not just Amazon workers. Lawyers, bankers and even hospice chaplains now work under the watchful eye of productivity tracking software
-Google employees push the company to stop collecting data on abortion searches
-Dan Loeb’s activist investment firm owns Disney’s business and boardin his line of sight
-CVS, Walmart and Walgreens pharmacies are on the hook for $650 million long after contributing to devastating opioid crises in two Ohio counties
You’ve heard about the AMC monkeys and the fervor for AMC stocks on r/wallstreetbets, but what do you know about Adam Aron, the 67-year-old CEO who runs the most famous stock company of them all? Bloomberg’s Felix Gillette and Eliza Ronalds-Hannon share Aron’s stunt and success story in a new profile.
Here is an exerpt :
“On March 15, when Aron announced that AMC was acquiring 22% of the largely inactive mine for $28 million, he had much the same reaction he had triggered years earlier with his airship. Jaws dropped. Spirits wavered. Somehow a recently troubled movie theater chain, rescued by a distressed loan hedge fund, pumped up by retail investors profiting from troubled stocks, was now part owner of a mine of troubled gold and silver, in a pocket of the troubled country. on a planet in pandemic distress. The whole thing looked like a national parable. In America in 2022, distress was the new gold – or maybe fool’s gold. It was hard to say for sure. »
Read the full piece and decide for yourself.
Have a stress-free weekend.