The cost of corporate activism

MARY REICHARD, HOST: It’s Tuesday the 6th of June, 2023.

Glad to have you along for today’s edition of The World and Everything in It. Good morning, I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher.

First up: how true is the slogan “go woke, go broke”?

Two months ago, Bud Light built an online campaign around Internet personality Dylan Mulvaney, a man who famously identifies as a woman.

DYLAN MULVANEY: This month, I celebrated day 365 of womanhood. And Bud Light sent me possibly the best gift ever, a can with my face on it!

REICHARD: Conservative-leaning consumers acted fast; they stopped drinking Bud Light. Analysts thought it’d blow over. It didn’t. Brewer Anheuser-Busch InBev has lost nearly $30 billion dollars in market value and counting.

EICHER: Then there’s Target, the big retailer. Customers in May posted videos from stores showing “PRIDE” displays aimed at children, and women’s swimsuits designed to conceal male anatomy. Target has now lost more than $12 billion dollars in value.

So we’re seeing significant marketplace pushback.

REICHARD: Joining us now to talk about this is Jerry Bowyer. He is a WORLD Opinions contributor, president of Bowyer Research and author of The Maker vs. the Takers: What Jesus Really Said About Economics and Social Justice.

Jerry, good morning!

JERRY BOWYER: Good morning, Mary. How are you?

REICHARD: I'm doing well, I'm glad you're here. I think many Americans now see there’s a strange system in place. Companies are acting against their own best interests and against those of their shareholders. And we hear terms like ESG. What does that mean?

BOWYER: Well, it's an acronym that stands for Environmental, Social, and Governance, which are then adjectives that are modifying investment. So it amounts to a set of investment decision making tools, which are not rigorously associated with financial outcomes, but more associated with desirable political and social outcomes. It's basically a way of bringing politics into finance, without admitting that it's politics. And um one of the reasons to believe that is not only the way it operates in the real world, which is that it's highly aligned with the left side of the political spectrum. This year, the fastest growing category of ESG proposals, according to the ESG think tanks and advocacy advocacy groups are pro abortion proposals. Proposals which ask companies to evaluate the risk of doing business in pro life states. So you know, the way it acts acts like politics.

REICHARD: Jerry, talk about the work you do to counter political pressure corporate leadership gets from people on the left?

BOWYER: Well, I work with investment funds, and also with financial advisors, in a couple of ways. One is to vote, to use their votes, So for the vast majority of people, if you own a share, you own a vote, you have the ability to vote. Now, what usually happens is people own the shares through a mutual fund or an ETF. So they've given away their vote. Or they might own the shares themselves, but they get this proxy card in the mail. And it's complicated, and it's confusing, and frankly, they throw it, they throw them out. So what's happened is the asset managers, even the conservative and Christian ones, have, to a large degree, turned to the proxy advisory services, to say, well, you just tell us how to vote. And those proxy advisory services are pretty much uniformly on the left, although in the past couple of years, we've seen some, some promising developments on their part. So, what I've been doing is helping investment funds and financial advisors to vote in a way that is consistent with the good of the investor, to set aside politics, to set aside ideology. To not vote ESG, not to vote the opposite of ESG, either. But instead to ask of every proposal that's on the ballot, is this good for the shareholder? Or is this bad for the shareholder? Yeah, that's a yes vote and a no vote respectively. So it's largely a de-politicization agenda, as opposed to a conservative political agenda, countering the liberal political agenda.

REICHARD: And that's what you've been doing with Target starting with their decision to ban the sale of books that made the case against sexual reassignment surgery for minors. Tell us about that.

BOWYER: Yeah, and we're concerned about Target for some time, a lot of us have been I mean, the Target story goes back to 2010, when a CEO there gave money to a conservative politician actually, when the company gave money to a conservative politician for business reasons. But he was also opposed to same sex marriage, and the LGBTQ, that group, those letters of the alphabet came forward and severely targeted the company and unleashed a torrent of abuse and shamed them into apologizing. Eventually, they pushed that CEO out, then they got a new CEO. And that's the CEO we have right now - Cornell. And basically since then, Target has been atoning for its alleged homophobic policies, by essentially caving in to that interest group over and over and over again, you know, including transgender bathrooms, banning books that LGBTQ people argued against. So we were dealing with them. And we were actually making some progress, and then we reached basically like a brick wall. And there was like, there was no more constructive communication, but not before we were able to register the warning, which is that you are you're playing chicken with this brand. And yes, in the past, all of the blowback, you've gotten is from the left. And so you think the only thing you have to worry about is, you know, the letters LGBTQ. But I think you're going to learn that there's a limit to what you can do. And that once Middle America wakes up, they're bigger, arguably angrier, and they're harder to appease. And I think we found out since then, that Target they did go too far. Now they're now they're seeing the backlash. And I reached out to them again, saying, let's have this conversation again now. And it is a brick wall at this point.

REICHARD: Jerry, do you see a time when companies will stop doing the bidding of left-wing activist groups?

BOWYER: Yes, well, I see a time when companies that are not ideologically committed will stop doing it. I think a lot of CEOs are just responding to, you know, pleasure and pain points, right? If they do something and they get, you know, they get electric shocks, they do less of it. If they do another thing, and they get cookies, they do more of it. They're just responding to incentives. And so we didn't show up. So in those cases, I think they'll respond to the New World, which is we're awake now. And frankly, we're looking for other companies - we generally, I’m saying, I'm not big into boycotts. But you know, the conservative community is looking for the next Bud Light, the next Target, you know, who's gonna get boycotted next? So I think companies that are open minded will, in fact, move to the center. Some companies are all in. I don't think you're going to dissuade those people very easily. But I think the vast majority of these companies are tired of this. And so I think the momentum is very much on our side and against the other side. But it's still early. You know, we still do only maybe a 10th of the number of proposals, we still lose the votes more often. But I think as we begin to engage more, because I think we are the majority of shareholders, not the majority of people who are talking to companies. As that begins to increase and as people learn how to do it, I think this is going to get to the point where the majority of voices are back, get back to business, serve the shareholders, do the politics on your own time. And I think the majority of companies, the vast majority, will say okay, yeah, I want to get back to being whatever a lumber company, an oil company. If I wanted to get into politics, I would have run for the Senate, not try not become the CEO of a Fortune 500 company.

REICHARD: Vigilance the price of freedom.

BOWYER: Hear hear!

REICHARD: Jerry Bowyer is a WORLD contributor and president of Bowyer Research. Jerry, it’s been a pleasure. Thanks so much.

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