Friday, March 30, 2018

Corporate Boycotts, A Change of Heart from CEOs, and H & M's Diversity Initiative- A Roundup of The Week's News Stories

Within the past 24 hours, I've seen at least three news article that led me to reflect on my past blog posts. Rather than write a full post on each article, I've decided to note some observations.

The Tweet That Launched A Boycott (And Maybe a Buycott)

I've been skeptical in the past about whether boycotts work.  Perhaps times are changing. This week, Parkland shooting survivor David Hogg tweeted that advertisers on Laura Ingraham's cable show should pull out after she tweeted,  "David Hogg Rejected By Four Colleges To Which He Applied and whines about it. (Dinged by UCLA with a 4.1 GPA...totally predictable given acceptance rates.) https://www.dailywire.com/news/28770/gun-rights-provocateur-david-hogg-rejected-four-joseph-curl "  On March 28th, the 17-year old activist responded with "Soooo what are your biggest advertisers ... Asking for a friend. ." He then provided a list of her top twelve sponsors.

As of 8:00 p.m. tonight, the following companies dumped the Fox show, eleven after the talk show host had apologized, stating “On reflection, in the spirit of Holy Week, I apologize for any upset or hurt my tweet caused him or any of the brave victims of Parkland... For the record, I believe my show was the first to feature David immediately after that horrific shooting and even noted how ‘poised’ he was given the tragedy ... As always, he’s welcome to return to the show anytime for a productive discussion.”

The companies that have pulled their advertising include Nutrish, Office Depot, Jenny Craig, Hulu, TripAdvisor, Expedia, Wayfair, Stitch Fix, Nestlé, Johnson & Johnson, Jos A Bank, Miracle Ear, Liberty Mutual and Principal. But will they ever return to the show after the attention moves to something else? Will the sponsors face a "buycott," where Ingraham's fans boycott the boycotters or increase their support of the advertisers that Hogg specifically named but have chosen to stay with Ingraham? Time will tell. 

Silicon Valley CEOs Warm to President Trump

Last year, I posted about various CEOs choosing to distance themselves from President Trump by resigning from advisory councils because they disagreed with his actions or positions on everything from immigration to his reaction to the events in Charlottesville. Today, the New York Times reported that some of the same CEOs that bemoaned Trump's election and/or publicly condemned him have now had a change of heart. Apparently, they have more common ground than they thought on areas of tax reform, infrastructure, and looser regulation. I look forward to seeing whether any of these companies or CEOs refrain from criticizing him in the future or, more tellingly, whether they choose to use PAC money or personal funds to support his re-election. 

H & M Asks One of Its Lawyers To Lead Diversity Initiative

H & M has lots of problems from underperforming designs (billions in unsold clothes) to continued fallout from its "coolest monkey in the jungle" hoodie. As you may recall, in January, a number of consumers, public figures, and other called for a boycott of the company after a young black boy advertised a green hoodie with the word "monkey." H & M even had to close its store in South Africa.  The fast fashion company has now turned to one of its in-house lawyers to lead a 4-person team to focus on diversity and inclusiveness. The lawyer will report directly to the CEO in Stockholm. Notably, the board is all white. Should the board diversify as well? It's hard to say. While I support diversity in the executive ranks and the boardroom,  there is no evidence that the monkey hoodie led to the 62% drop in operating profit in Q1. Instead, experts note that consumers just didn't like the selections, even at steep discounts. Further, the average H & M customer probably has no idea about this new diversity initiative and even if the customer knew, it'sdoubtful that would change buying habits. Even so, I applaud H & M for taking concrete steps. The company already produces a compelling Sustainability Report. I look forward to seeing if the company can return to profitabiity while keeping its commitment to diversity. 

 

 

 

http://lawprofessors.typepad.com/business_law/2018/03/corporate-boycotts-a-change-of-heart-from-ceos-and-h-ms-diversity-initiative-a-roundup-of-the-weeks-.html

Corporate Governance, Corporate Personality, Corporations, CSR, Current Affairs, Marcia Narine Weldon, Shareholders | Permalink

Comments

In the boycott/boycott context, I was corresponding with a colleague who – among his other endeavors – possesses a firearms retail license. We noted Remington’s bankruptcy. We noted that the prior Administration’s loud threats to firearm purchase and ownership had motivated purchases exponentially and for the savvy investor excellent ROI. We further noted the change in Administration and messaging had calmed demand. Then, the Parkland shooting and former Justice Steven issued his position on repealing the 2nd Amendment. The consistent reactions to scarcity and potential for prohibition can reignite the demand and potentially exacerbate the object of limitation. For those consumers invested in the issue, there is no doubt that consumers will boycott/buycott. Hogg is in the midst of his “15 minutes” of high profile. I do think, just in the Delta Airlines case, there are prices to be paid.

As to Silicon Valley, I’m not so sure that “warming” to initiatives is at the crux. At their core, corporations exist to profit and they need “access” to further that existence. If smart, these Boards realize they exist in a bubble. John Hancock purportedly said, “There, I guess King George can read this without his spectacles.” At some time, these executives are going to need something.

Posted by: Tom N | Mar 31, 2018 9:03:56 AM

It is being reported that firearm sales ROSE in March, 2018 by 11.4%. This is unsurprising and limits and proposed prohibitions always seem to stir this reaction. See: https://www.newsmax.com/newsfront/gun-sales-background-checks-rise/2018/04/05/id/852752/

Posted by: Tom N | Apr 5, 2018 11:31:47 AM

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