Comparing CEO Statements

A writer for The New York Times doesn't condemn CEOs for leaving President Trump's business advisory councils, but she says that we should expect more, particularly from those who gave what she considers vague statements. Zoe Greenberg writes,

It's fine to thank these executives for doing the right thing. But to look to these men as brave leaders? Let's not lower our standards, both politically and morally, so far that we're cheering for the absolute bare minimum of human decency.

She gives the example of Brain Krzanich of Intel's statement:

 I resigned to call attention to the serious harm our divided political climate is causing to critical issues, including the serious need to address the decline of American manufacturing.

The Los Angeles Times rounded up 15 CEOs' statements about their decision to leave, some before the Charlottesville incident. Comparing the statements and the reasons they identified is an interesting exercise. Some executives used the opportunity to promote their companies, and some gave more specific reasons that others.

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Discussion:

• Which executives most used the opportunity to promote their company?
• Which gave the most vague and most specific reasons for leaving?
• What other differences do you notice?
• Which statements do you find most effective and why?

CEOs Leave President Trump's Business Advisory Councils

Several CEOs have left or were planning to leave President Trump's business advisory councils after his response to the Charlottesville, VA, incident. President Trump has been stalwart in blaming "both sides" of the protests in Charlottesville, which escalated in violence. For some CEOs, the response wasn't strong enough in condemning white supremacists. In a news conference, President Trump said there was violence among the liberal contingent as well as those wanting to, for example, defend confederate statues. He drew an analogy between George Washington and Thomas Jefferson, who owned slaves, with Robert E. Lee, who led the confederate army during the U.S. civil war.

Merck chief executive Ken Frazier was the first to resign from the president's manufacturing council. Others filed suit, and still others planned to resign, including Indra Nooyi of Pepsi, Jamie Dimon of JP Morgan, Alex Gorsky of J&J, and Jeff Immelt of GE.

Doug McMillon, Walmart's chief executive, has been vocal and has faced criticism from Walmart customers. In a memo to employees, McMillion explained his position:

 Respect for the individual is one of our core beliefs at Walmart. And the role we play in communities around the country to build a more diverse and inclusive society is more critical than ever as the tragic events in Charlottesville over the weekend painfully reminded us. Our prayers are with the victims and their families. 

As we watched the events and the response from President Trump over the weekend, we too felt that he missed a critical opportunity to help bring our country together by unequivocally rejecting the appalling actions of white supremacists. His remarks today were a step in the right direction and we need that clarity and consistency in the future.

Our country is facing some very difficult issues that require our elected officials, business leaders and community-based organizations to work together. Representing a company with the largest and one of the most diverse groups of associates in the U.S., and an even more diverse customer base of tens of millions of customers, we believe we should stay engaged to try to influence decisions in a positive way and help bring people together. I will continue to strongly advocate on behalf of our associates and customers, and urge our elected officials to do their part to promote a more just, tolerant and diverse society. 

Thank you for representing Walmart and our values today -- and every day.

Before another group, inspired by Nooyi of Pepsi, could resign, President Trump decided to disband all of his business advisory councils. The decision is a blow to the president, who prided himself on his business relationships when taking office.

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Discussion:

• Did these business leaders do the right thing? Why or why not?
• What did it take for Merck's CEO to take the lead, and for Pepsi's CEO to inspire the next wave? What was at risk for both of them and for other CEOs?
• Besides addressing the Charlottesville situation differently, what could President Trump have done differently to maintain his relationships with these business leaders?

Cargill Muslim Employees Get EEOC Support

The Equal Employment Opportunity Commission (EEOC) is siding with Cargill employees over their right to pray at work. Employees filed a claim against the company because their opportunities to pray during breaks had been curtailed. The EEOC's support means that Cargill management will have to reach an agreement with employees on prayer time.

The issue began in Colorado in 2015 when 150 employees walked off the job in protest. Supervisors told them they would no longer be able to prayer during breaks. The employees were terminated for attendance violations.

Employees report being closely monitored so they didn't pray, for example, in the bathroom. Cargill denies such claims.

The hope is for Cargill and the employees to reach a confidential agreement. If they fail, the employees can pursue a discrimination lawsuit.

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Discussion:

• What protects U.S. employees' right to pray at work?
• How would you describe the company's position?
• Assess statements by the company in the Star Tribune article. Based on these quotes, how well is the company responding to the controversy?

BMW Denies Collusion

German automakers felt another blow this weekend when they were accused of colluding. The news came as Daimler recalls 3 million cars, and Audi recalls 850,000 to lower their emissions.

German officials found documents related to a potential technology cartel when looking for evidence about potential anti-trust issues related to steel. To avoid penalties, VW and Daimler admitted meeting regularly with competitors. Spiegel magazine quoted VW as saying five German carmakers met "several times a year" and had been "co-ordinating the development of their vehicles, costs, suppliers, and markets for many years, at least since the Nineties, to the present day."

One area of discussion was about the size of the technology to hold AdBlue, a chemical cleaning substance. Automakers agreed on a smaller tank to reduce costs and allow more room for accessories, such as audio, but this meant less efficient cleaning of exhaust gases.

In a statement, BMW denied the accusations:

"BMW vehicles are not manipulated and comply with respective legal requirements," and "The BMW Group categorically rejects accusations that Euro 6 vehicles sold by the company do not provide adequate exhaust gas treatment due to AdBlue tanks that are too small."

VW may have learned a lesson from the emissions scandal. A New York Times article summarizes how earlier admissions may have helped avoided trouble:

If Volkswagen had been honest with American officials [in May 2014 when Winterkorn received a memo about the inconsistent test results], the damage to the company's reputation and finances would very likely have been serious but not devastating. Similar cases suggest that Volkswagen would have paid a fine in the hundreds of millions of dollars.

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Discussion:

• Assess BMW's strategy. What principles of persuasion is the company using? What crisis communication techniques would be useful to the company at this point?
• To what, specifically, is VW admitting? What, specifically, is BMW denying?
• Where's the line between meeting and collusion?

Comey's Testimony Offers a Window

Former Director James Comey's testimony tells us-at least from his perspective-a bit about politics in the Trump Administration. A Business Insider headline reads, " 'The most shocking single document' since Watergate." However, the article quotes a good friend of Comey's.

Yet his testimony is impressive, and the media is enjoying the story. Comey describes how President Trump, at a private dinner, asked for his loyalty, and Comey stressed the importance of the FBI being independent from the White House. He reports that the President asked if he wanted to continue on as FBI director, although he had said twice previously that he did.

Comey reports about another private meeting in which the President said, "I hope you can see your way clear to letting this go, to letting Flynn go. He is a good guy. I hope you can let this go." The question is whether the President's actions constitute obstruction of justice. A Wall Street Journal video commentary describes the President's requests of Flynn as "unusual."

Today is an interesting day to compare headlines and see the political bent of the media:

• New York Times: "Trump Pressed Comey to ‘Lift Cloud' of Russia Inquiry"
• Wall Street Journal: "Comey Says Trump Sought Loyalty"

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Discussion:

• How credible do you find Comey's testimony? What influences your opinion? Consider the word choice, writing style, and so on.
• How does what Comey describes differ from business relationships? What could be similar between and manager and an employee working in a company?
• What do you think will happen next?

Ford Announces New CEO

Ford has appointed a new CEO to replace Mark Fields, who had been with the company for 28 years. Jim Hackett joined Ford's board in 2013 from Steelcase, and he'll have three new leaders reporting to him. A New York Times article describes Fields' less-than-stellar performance as CEO:

During Mr. Fields's three-year tenure - a period when Ford's shares dropped 40 percent - he came under fire from investors and the company's board for failing to expand the company's core auto business and for lagging in developing the high-tech cars of the future. . . .

The board's decision to change management was made on Friday, eight days after Mr. Fields had been sharply criticized during the company's annual shareholders' meeting for Ford's deteriorating financial results.

Ford has faced safety recalls and has been struggling against GM and Google to develop a self-driving car. The board said Fields' retirement decision was mutual.

The company's news release included this quote from the chairman about Fields:

Mark Fields has been an outstanding leader and deserves a lot of credit for all he has accomplished in his many roles around the globe at Ford," Bill Ford said. "His strong leadership was critical to our North American restructuring, our turnaround at the end of the last decade, and our record profits in the past two years.

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Discussion:

• Read the full press release. Describe the audience, objectives, and structure. What's the purpose of the summary bullets at the top?
• Should the company's press release have said more or something different about Fields? Does the quotation seem to reflect reality?

President Trump's Coast Guard Speech

President Trump gave the commencement speech at the Coast Guard Academy. The theme was perseverance, and he gave the new graduates good advice:

Now, I want to take this opportunity to give you some advice. Over the course of your life, you will find that things are not always fair. You will find that things happen to you that you do not deserve and that are not always warranted, but you have to put your head down and fight, fight, fight. Never, ever, ever give up. Things will work out just fine.

Apparently, he then went off script:

Look at the way I've been treated lately. Especially by the media. No politician in history - and I say this with great surety - has been treated worse or more unfairly. You can't let them get you down. You can't let the critics and the naysayers get in the way of your dreams. I guess that's why, thank you, I guess that's why we won.

The speech came after a difficult week for the president: he fired FBI Director James Comey, who questioned the president's integrity in return.

Of course, reports about President Trump's speech vary according to political alignment. Conservative outlets such as Rush Limbaugh and Fox News applaud his calling out the media. Limbaugh wrote, "Media Livid," and Fox's headline was "Trump Takes on Media." Compare those headlines with CNN's: "Trump's Pity Party at Coast Guard Academy Was Shameful."

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Discussion:

• What's your view of the speech? Do you agree more with the conservative media outlets or the more liberal CNN? How does your opinion align with your own political views?
• Take the other side of the argument. In what ways was the comment appropriate or inappropriate?
• How would you assess President Trump's speech overall? Consider delivery skills discussed in Chapter 11.

Chobani Claim Dropped and a Muddy Apology

Right-wing radio host Alex Jones admitted he "mischaracterized" Chobani when he posted negative messages to social media. Chobani had sued Jones for false and defamatory comments when Jones wouldn't remove posts or retract the comments. You may remember Jones for the "Pizzagate" hoax, which linked Hillary Clinton with a child sex ring at a restaurant.

This time, Jones posted on Twitter, "Idaho Yogurt Maker Caught Importing Migrant Rapists."

Jones issued this apology, and the case is said to be closed. @SorryWatch posted this commentary on the writing. Passive voice is useful for avoiding responsibility.

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Discussion:

• What examples of passive voice do you see in this paragraph?
• How would you rewrite Alex Jones' apology if he wanted to take responsibility?

Hyundai's Whistleblower

Kim Gwang-ho took a big risk revealing safety issues at Hyundai, his employer for the past 26 years. The engineer reported failures in proper engine checks that could prevent accidents. Whistleblowing is extremely rare, as Kim describes, "I will be the first and last whistleblower in South Korea's auto industry. There are just too many things to lose." He also said, "I had a normal life and was better off, but now I'm fighting against a big conglomerate."

Hyundai denied allegations in a statement, as reported by Reuters: "The company promotes openness and transparency in all safety-related operations, and its decisions on recalls comply with both global regulators and stringent internal processes."

The company also defended its practices, arguing that they were investigating issues before Kim raised them: "Hyundai has taken appropriate steps to ensure safety, quality and compliance with applicable regulations in our markets, including all recalls Hyundai has conducted to date."

Meanwhile, investigators raided Kim's house and confiscated some documents. Kim said, "At first my wife asked me not to do it. She was worried about living costs if I'm fired. But I'm stubborn, and persuaded her that the problems will be buried forever without my confession."

But the company eventually rehired him and reimbursed him for lost work time.

Kim's complaints did inspire the South Korean government to mandate a recall-the first in the country's history. In addition to the 1.5 million cars voluntarily recalled by the Hyundai and Kia, the government requirement adds another 240,000 to the list. 

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Discussion:

• Analyze how Hyundai is handling this situation and the statements made so far. What could be improved?
• How believable do you find Hyundai's responses? Based on what language or other criteria are you forming your opinion?

DeVos Steps Up About Formatting Rules

Two weeks ago, Upward Bound applications to help kids get into college were rejected for formatting errors such as line spacing. To protest, 32 members of the House of Representatives signed a letter asking the Department of Education to reconsider the grants that affected approximately 2,700 students; an excerpt is below.

In response, Betsy DeVos, Secretary of Education, established a "new policy" that prevents program officers from using page limits and formatting as "mandatory requirements":

"Program offices may suggest page limits and formatting standards (such as font size, line spacing, and the like) but may not use ignoring these suggestions as a basis to reject grant applications."

In her letter, however, DeVos does not address the recently rejected applications.

Discussion:

• What do you think DeVos should do at this point? What should she consider in her decision?
• Assess the Representatives' letter. What principles of persuasion are used, and how could the letter be improved?

Sunny Co. Renegs on a Freebie

Be careful about offering unlimited free items. Sunny Co. Clothing company learned this lesson the hard way when it posted a message on Instagram.

Naturally, nearly "everyone" reposted the image hoping for a free suit, and people complained about their feeds being over-run with red bathing suits.

The company eventually posted some rules: "Due to the viral volume of participants, we reserve the right to cap the promotion if deemed necessary." They also warned of delays because of the "overwhelming volume of orders."

One good thing did come from the situation: Sunny Co.'s followers increased from 24.1 to 458,000. Now, whether that translates into sales is another question.

Discussion:

• The company could have had some fun with this. What ideas do you have?
• Should they have known better, or was the outcome too hard to predict?

Barclays Chief Tries to Find Whistleblower

The Guardian used the word "hunt" to describe Jes Staley's search for an employee who tried to communicate anonymously with the board of directors to file a complaint about another employee. As the chief executive of Barclays, Staley tried to track down the author of the two letters and received help from internal security employees and a U.S. law enforcement agency.

In an email to employees, Staley explains his rationale for going after the whistleblower:

"One of our colleagues was the subject of an unfair personal attack sent via anonymous letters addressed to members of the Board and a senior executive of Barclays. The allegations related to personal issues from many years ago, and the intent of the correspondents in airing all of this was, in my view, to maliciously smear this person."

As a result of an internal investigation, Barclays officials said, Staley acted "honestly but mistakenly." He may, however, receive a smaller bonus. We also may learn more: three regulatory groups are investigating the matter.

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Discussion:

• Read Staley's email to employees. What's your interpretation of his perspective? To what extent do you see his perspective?
• What should the board of directors do at this point?