Tuesday Topic: Conscious Capitalism

I think the trend is a win/win and is encouraged and enabled by government reducing the "punishment" (excessive taxes and regulations) on successful companies.  The demonization of profits and success can be partly countered by businesses embracing conscious capitalism.  Many businesses recognize that treating employees well translates into benefits for all stakeholders.  The less regulatory burden and tax burden that is put on businesses, the more time and resources we have available for being great employers and citizens.  Big government doesn't believe we will do good if left to our own choices; we need to prove that theory to be wrong.

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Mary Fowler
Chief Executive Officer
The Peoples Bank
Magnolia AR
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Original Message:
Sent: 01-28-2020 09:03
From: Barb Rehm
Subject: Tuesday Topic: Conscious Capitalism

Does it seem like more companies are publicly committing to causes like diversity or climate change? Take Goldman Sachs, which late last week said it will not take a company public unless its board has at least one member who is female or a minority. The investment bank said it will raise that bar to two diverse directors in 2021.  Goldman follows BlackRock, which has said it expects to see at least two female directors on the companies in its portfolio, and State Street, which has pledged to vote against nominating committee members on all-male boards. The beginning of this trend may trace back to Larry Fink's 2018 shareholder letter when the BlackRock CEO said companies should have a purpose beyond profits. The Business Roundtable took up the mantle in 2019, changing its long-standing position that a public company's primary duty is to its shareholders. The new statement puts customers, employees, suppliers, communities, and the environment before owners.

These efforts are often called "conscious capitalism," and I wonder what you think of the trend? Businesses, especially banks, have always been leaders in their communities, so is this just another step down that path? Or do you think this warps the role of business in society? Or maybe you land somewhere in between. I'd love to get a conversation going on this, so please let us know where you stand.

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Barb Rehm
Senior Managing Director
Promontory Interfinancial Network, LLC
Arlington VA
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