The JUST Report: “Corporations have but one value: Shareholder value. That’s all.”

June can be a tricky month for corporate leaders. Between Pride, Juneteenth and Father’s Day, there’s a lot for companies to stake out a position on, support, or – in an era of backlash – potentially stay silent on. The cost of getting things wrong can be significant: remember last year’s controversy surrounding Target’s placement of LGBTQ apparel in stores? 

Jon Stewart weighed in recently, “Why are we allowing ourselves to get worked up over whether corporations are pro-gay or have traditional American values?” he asked. “Because corporations have but one value: Shareholder value. That’s all they have […]There is nothing corporations do that is not in service of their bottom line.”

Our polling of the American public, as well as our investment research, suggest there’s more to it than that. Companies need to navigate issues around politics, society and values precisely because of their connection to future business performance. Whether it’s customers, workers, suppliers or local communities, corporations need to be the best they can be in order to compete effectively and create value. Our interview this week with Levi Strauss’s Chief Human Resources Office details how one aspect of being a great employer – expanding paid family leave – builds employee loyalty, improves performance, and hones culture. 

Another key point is this: To the American people, it’s actions that count, not words. Companies need to know what their stakeholders want, understand the business case, lay out an authentic strategy for achieving it, and be prepared to live with their decisions. Put another way, companies should worry less about pride flags and statements of racial solidarity, and more about whether workplace practices, customer engagement, and other stakeholder strategies are genuinely producing results.  

Be well, 

Martin

Quote of the Week

“Paid family leave is a relatively small investment with a very meaningful return, our actual expense is tracking under initial projected expense. Our paid family care policy globally costs us only 36% of what we’d projected, and since our global enhancement in January, we’ve had over 260 leaves across 20 countries.” 

• Tracy Layney, CHRO of Levi Strauss & Co, speaking on how the benefits to expanding paid family leave far outweighed the costs in our recent interview.  

JUST in the News

JUST Board Member Xavier de Souza Briggs and co-writers Joe Parilla and Mayu Takeuchi take a deep-look at how small-and-mid sized cities around the U.S. can advance racial equity and inclusive economic growth in their latest piece for The Brookings Institution. 

JUST AI

Microsoft’s “Recall” feature, which automatically takes screenshots of tasks performed on PC so that the data can be retrieved quickly in the event of a wipe, has come under fire from cybersecurity experts for being a security “disaster”. Forbes has the story. 

Must Reads

Bloomberg reports that Citigroup Inc. is expanding their family leave policy, allowing new parents in the U.S. 16 weeks of paid leave (including adoptive and surrogate parents), and all employees to take two weeks of paid leave annually to care for an immediate family member who’s seriously ill and incapable of self-care.

Walmart will pay bonuses to 700,000 hourly U.S. workers, an idea that came from employee feedback to improve retention. Both part-and-full-time employees will be eligible. Reuters has the story. 

Bloomberg chronicles IKEA’s renewed investment in its workforce after costly quitting spiked across the globe, pushing the company to improve compensation, create more flexible schedules, and ensure a smoother orientation for new hires.

Chart of the Week

This chart comes from Bloomberg’s article on Citigroup’s new paid family leave policy, and shows how Wall Street and big banks are pushing to match each other with more expansive leave policies.