By law, managers of employer-sponsored pension plans must act in the best interests of investors. Unfortunately, many such fiduciaries are applying an unusually broad definition. That’s why the U.S. Department of Labor has clarified the issue. On April 23, the DOL released a guidance statement intended to discourage benefit managers from applying the principle known as Environmental, Social and Governance to investment decisions. Such a practice might seem worthy, noted the department, but it may place safety and soundness in harm’s way. The action is especially a rebuke to those who see issues advocacy as a top business priority.
Environmental, Social and Governance (ESG), alternately known as Corporate Social Responsibility, is a philosophy holding that a corporation is not only a business enterprise, but also a steward of the public good. A company, in this view, can and should be at once profitable and morally conscious. A company must … Read More ➡
There’s nothing unusual about a corporation offering employees paid leave for vacations, illness or personal emergencies. That’s a fact of the modern workplace. But lately employers have begun to provide paid leave for something far less justifiable: social justice activism. Employees themselves, backed by social media mobs, increasingly are demanding that management take stands on gun control, global warming, immigration and other major issues and that they should be compensated for taking part in protests. And these shakedowns in the future might cost noncomplying executives their jobs. It’s another example of why business should not be a vehicle for political advocacy.
The Left always has been resourceful in building cadres. And the workplace has become a new political frontier. Not that many companies aren’t already on board with this. At Luxe, a San Francisco-based valet parking smart phone app, founder and CEO Curtis Lee, angered over President Trump’s … Read More ➡
With about $6 trillion of assets under management, BlackRock Inc. carries a lot of weight in the business world. And Laurence Fink, CEO and chairman of the New York-based investment firm, wants everyone to know that. In a letter dated January 12, Fink urged dozens of CEOs of publicly-traded companies to expand their horizons beyond the confines of profit. “Society is demanding that companies, both public and private, serve a social purpose,” he wrote. “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” Though such words sound reasonable, they epitomize a common error about the institutional role of the corporation.
For decades, corporations, prodded by government, nonprofit activists and their own shareholders, have been retooling themselves as social problem solvers. Under the doctrine of Corporate Social Responsibility (CSR), companies are behaving as policy-oriented philanthropies. … Read More ➡