fortune--2020-10-01--The World Health Organization is leaning on big tech to navigate the COVID-19 pandemic

COVID-19 has now killed more than one million people worldwide, and more than 200,000 in the United States with no signs of letting up. In Europe, countries once thought to have the virus under control are seeing surges once again, spreading fears that a second wave of the deadly pandemic is on its way.
We’ve seen already that the virus doesn’t respect national borders, and global health experts have repeatedly called for international cooperation in response to the pandemic.
But in July, the Trump administration gave official notice that the U.S. intends to fully withdraw from the World Health Organization by the middle of 2021, in the meantime it will withhold funding and has begun to withdraw staff that were seconded from the U.S. Department of Health and Human Services.
The president has blamed the WHO for mishandling the pandemic. “So much death has been caused by their mistakes,” the president told reporters during a White House briefing in April. Critics, however, argue that the president is using a scapegoat, and that he’s relying on false evidence, like a non-existent article published in noted medical journal, The Lancet.
The WHO, an organization under the wider umbrella of the United Nations, has been tasked with coordinating international efforts to stop the spread of COVID-19. Pulling funding from the organization could do great damage and potentially prolong the ill-effects of the pandemic. The United States is currently responsible for the largest percentage of funding for the WHO with 22% of assessed dues. It also provides the largest amount of voluntary assets.
Corporations have been stepping up to fill the void. Google, Microsoft and Facebook are taking on larger shares of the burden for the organization which also provides guidelines for the treatment of illnesses like malaria and tuberculosis. But the role companies play in quasi-governmental bodies is also posing its own set of challenges.
Fortune sat down with WHO chief information officer, Bernardo Mariano Jr., at the Virtual Edition of the Global Manufacturing and Industrialisation Summit to discuss the crisis at hand and what the future of world health post-pandemic might look like. The conversation has been edited for length and clarity.
What does this pandemic highlight about the need for nations to cooperate across borders to prevent the spread of COVID-19 and other diseases?
Bernardo Mariano Jr.: The healthcare sector has been traditionally siloed, especially in developed countries. This pandemic is highlighting the need to have a better interoperable ecosystem, it’s also highlighting the need to cooperate across borders between countries and it’s showing that we need to rethink the digital transformational healthcare sector in such a way that we really leverage technology. Think about telehealth and telemedicine. What is stopping countries from using and leveraging telemedicine today? It is not a lack of technology.
So what needs to be done to help leverage cross-border telemedicine?
The private sector, public sector, governments, and international organizations need to come together to see what policies are needed to extract the maximum benefit and of course mitigate all of the issues associated with technology, be it privacy, be it ethics. Today in most countries a medical doctor, when he or she moves to another country it’s always very difficult to practice medicine in that country. If I go to a state I need to get the whole certification of that state to practice medicine, but then if a patient is not in that state I cannot practice telemedicine so those are some of the areas I believe that we can use COVID-19 to accelerate change in. We need to establish multi-state healthboards to help with contact tracing, for instance.
This is happening at a time when large swaths of the Western World seem to be retreating from cooperating on a global scale, what fears do you have about that?
The more divided we are, the more the virus will multiply and the more difficult it will be for us to get out of the pandemic. An outbreak in a faraway country doesn’t mean safety in your country. There’s no doubt that the COVID-19 pandemic is outlining the importance of global cooperation, because without that we’ll take two to four times longer to actually address the disease. It’s true that we can talk about vaccines but you still need access to them, and we live in a global world. A company in the Northern hemisphere or a developing country has branches in other countries and vice versa, so if we want the global economy to continue to progress the way it was progressing before the pandemic we cannot do that in isolation, we need that global cooperation.
The U.S. has said it will pull funding from the WHO, but you still get a significant amount of funding from U.S. tech magnates like Bill Gates, do you see U.S. tech playing a large role in the governing of the WHO in the future, and how do you navigate that?
We work with a holistic focus. And we do still work with the U.S. government, I mean we’ll work with any country willing to work with the WHO because the disease has no border and doesn’t understand differences in entities. So we’re really trying to use the convening power of WHO to bring all the parts together. All the sectors have a stake in the game because COVID-19 has shown that the fact that you’re a tech company or a transport company or in the hospitality industry doesn’t mean you’re safe from the impact of this pandemic.
The question here is how we bring all of the efforts together. I have to say here that we were very grateful to see the response from the tech sector, we had over 100 companies approaching us to offer pro-bono support for the pandemic in all sorts of areas. The fact that they all volunteered shows that they realize they need to bring what they can to the table to help address these issues.
You’ve commented before that predicting the weather shouldn’t be easier than predicting a deadly pandemic…
And it is surprising. We’re working on developing infrastructure by putting together what we’re calling a network of networks. We have a lot of different groups trying to drive the digital direction so we want to make sure that we bring all stakeholders: private sector, academia, NGOs, and governments together to discuss some of the key issues and some of the pain points that are not allowing us to progress fast enough. I understand that each sector may have its own interests, but that doesn’t mean that we can’t share the common goal to make sure that we’re better prepared for a pandemic. That we have the right technology, the right data and the right predictive models to minimize the impact on people’s lives and also the impact on the economy and social problems that we currently have with the pandemic.
So when do you start looking towards the future and potential pandemics beyond COVID-19?
We already started discussing that with a number of stakeholders and there are three topics that we’ve been discussing with developing partners such as The Gates Foundation and The Rockefeller Foundation. We’ve also discussed the topics with member states and we have a global strategy going forward.
So there are three topics: One of them is a disease surveillance system both at the global and national level to try to create an environment of modeling that is better than the weather forecast today, because there are outbreaks in some part of the world pretty much everyday and some of them are easy to control and others are not, like Ebola. The other one is the network of networks, we want to make sure we create a mechanism that allows for interoperability of systems, concepts, and policies that would bring all the players together. The last one is accelerating the transformation of the healthcare sector through telehealth and telemedicine.
We have to change our culture because we didn’t interact with the private sector previously and we never thought that we could sit at the same table as them, we looked at them as having a conflict of interest. But we established a framework of engagement with non state actors that allows us to actually have that engagement without compromising our own values.
It’s interesting because there is a serious economic interest here, COVID-19 has been terrible for the global economy…Have you noticed this increase in private sector companies wanting to work with you for those reasons?
Yes, there are always different interests. We work to make sure that we advance policies and support governments, and a private sector company will work to make sure that they make revenue. They can support pro bono engagement to a point, but there will be a point where they say ‘Look if I continue like that I’ll be run out of business.’ The question is, how can you find that equilibrium where the private sector delivers what they deliver with good governance while still protecting the interests of the company. This pandemic is ruining the food industry, the transport industry, the hospitality industry, they’re all impacted, all of them. So, we need to share the responsibility to preserve the ecosystem that the world exists in.
Also, remember one thing, after World War II, we created systems to prevent another world war. We built systems to make sure there were negotiations and discussions to prevent escalation of war because that was such a terrible experience. But we are also having a terrible experience with the pandemic, so we need to start thinking about having to prepare the world for the virus, not just war and i think we need to invest more into that.
The World Wars shifted the global order immensely, bringing us into this current era. Now, it feels like that era of global cooperation is winding down, but is the pandemic enough to retain global status quo?
What I’m saying is that we need to quickly adapt to new realities. The world needs to shift and adapt to these new challenges and not just be tethered to these old problems. The healthcare sector and investment in health, has long been ignored. We need to refocus our attention to investing in health, because while we never thought that the virus would put us in the situation where we are today, we’re here.
There’s such a difference between the creation of the UN and an organization that includes major companies like Google and Facebook So do you imagine that the way power is structured is shifting away from governments and into these giant tech companies?
It is. I mean Facebook has 2.7 billion users in the world across different geographies and social structures and they have the power to influence. These are the new realities, and the world needs to adjust as we move. We have this health risk, this virus, that is creating such a huge problem, and we need to be coordinated, cooperative, and united in solidarity, that’s the only way to address this. We need to invest in this and make sure that the world is much more prepared and that it is not just on the shoulders of the WHO or the UN or governments. It’s on all of us: the private sector, public sector, academia, all of us. We need every sector of society to act as a whistleblower if something isn’t working very well. We need the WHO and the UN to make sure that countries don’t keep reinventing the wheel and can learn from each other and can come together and say what was created in one country can be used in another, we have to strike that balance. It’s easier said than done but we need to do it.
How do we combat the spread of misinformation around COVID-19?
We have a new science being born called infodemiology. We have frontline workers and healthcare professionals fighting the epidemic, but we have another fight on our hands; information. It’s as deadly as the epidemic and we need to strengthen this science. We’ve brought in a number of specialists and we recognize that this is a key characteristic in any disease outbreak. We know much more than we knew six months ago and we’ll know much more six months from now. The question is how can this knowledge be quickly reached by people who need to know it in order to make sure that lives are saved and also that social and economic impact is minimized.
What’s the dream outcome of this tech community coming together?
What the whole world is trying to do right now is to get back to normal: The normal that we know, where we can travel, where I can shake your hand, where I can go to my mother who is living in Mozambique and hug her without fearing that I’m transmitting a disease. It’s all about using technology to accelerate therapeutics, and a vaccine is one of them. A number of companies have approached us to look at for instance the digitalization of immunization, so how can we digitize immunization records as we go through the process of a vaccine or medicine so we come away from the physical immunization card. Today the only international immunization card that exists today is a yellow vaccine card.
We should come out of COVID-19 with some good, accelerated practices that will allow healthcare professionals to conduct treatments with someone across a border. Because look at the European Union for instance, you had Spain and Italy with health systems on the brink of collapse during the earliest stage of the pandemic, and you had other countries nearby that weren’t in the same stage. Can you imagine the power of telemedicine in that scenario?
The United States has said they’re withdrawing funding from the World Health Organization. Do you see the U.S. playing a diminished role here?
I don’t think the United States will ever play a diminished role. Of course if you look at the situation over a short period of time that might be the impression, but we are here for a long period and I think the U.S. has been a leader in many forms and has been an excellent partner. The U.S. is the mother of WHO, and there will be a time where we’ll come back and say “okay fine, we’ve got over the critical phase and now we have huge challenges to address and multinational political issues so let’s get back to better prepare for the future.” I think we’re all learning lessons as we move.
And at that point we might have a different administration that’s a little more friendly to the WHO…
We will see and figure out what needs to change, all national governments will have to do a post-mortem analysis of how we acted, how we behaved, how we reacted and what we can do better. That includes the WHO, that includes the U.S., EU, and countries in Africa. I think the WHO is open to any recommendations for improvement because the bottom line is that we want to see a better world and better health for all. We will have the space and time to transgress some of the differences or issues that are perhaps today not the top priority. The top priority today is to address the virus.


fortune--2020-10-01--Spotify proves it: Europe can grow its own tech giants

One major Asian economy besides China is set for growth this year—and its GDP just rose 2.6 %

Almost daily, someone asks the question of how close we are in Europe to producing the next global tech titan. At last, it seems that aspiration is within reach.
For decades, founders in the U.S. appeared to share an unknown quality that drove incredible success and was impossible to replicate beyond the confines of Silicon Valley.
But the reality is far less magical and more practical. There is no “secret ingredient,” as such. The fact is that Europe simply didn’t have sufficient talent with experience for building large-scale startups, or investment at its fingertips, to nurture truly revolutionary tech businesses. European founders were forced to relocate to the U.S., or even to move there from the get-go in order to take on the challenge of “making it” in the world’s biggest tech market.
Now it’s a different story. In Spotify and Adyen, Europe boasts two tech giants with market capitalizations of nearly $50 billion. There’s no shortage of talent either, with Europe counting over 6 million developers to the U.S.’s 4.3 million, according to data from StackOverflow. Europe has a proven edge in sectors such as fashion, fintech, and gaming. And investment in European startups has more than doubled between 2015 and 2019, to $38.6 billion, from $15.4 billion, according to data from Dealroom.
Meanwhile, the U.S. labor market is facing its own challenges. The Trump administration’s drive to reduce immigration made the U.S. a less desirable destination for foreign workers, and demand for top talent outstrips supply. Tech salaries are sky-high, which makes it hard to keep valued employees not looking at the next offer.
As a consequence, European founders are staying in Europe longer, finding funding here, and often keeping leadership teams closer to home. In fact, research we released earlier this month as part of our guide to “Expanding to the U.S.” shows that, between 2008 and 2014, nearly 60% of European tech businesses expanded to the States before their Series A fundraising (often moving the whole operation there)—but in 2015–19, only 33% did.
Spotify’s London offices. Courtesy of Spotify
The still-crucial American market
For European entrepreneurs, tackling the ultracompetitive U.S. market is still a critical step in the journey for global growth. A handful achieve unicorn status without any real presence—including iZettle, Deliveroo, and Just Eat Takeaway, all companies in which our firm has invested—but there are few product categories large enough to support this approach. The U.S. remains the greatest market for tech, especially business-to-business products; according to Gartner, spending on enterprise software in North America will be $240 billion in 2020, compared with $106 billion in Europe. American corporates are more likely to be early adopters, understanding the value of buying software from groundbreaking startups rather than buying software from established vendors.
The real difference is that a wholesale—or even partial—relocation of a company’s primary operations is no longer a prerequisite for success.
Even where the U.S. is the biggest market, a growing number of businesses are maintaining their research and development arms in Europe. “Made in Europe, sold in the U.S.” is now a bona fide way of doing business. Only 50 of the 275 European startups we analyzed that sell products in the U.S. have any R&D headcount there.
There are clear and distinct models by which European companies can perform a successful U.S. expansion. Businesses that get 15% to 30% of their revenues from the States should stay anchored to Europe, but build an autonomous sales operation stateside. This can involve tradeoffs between securing local market knowledge but ensuring new employees are a cultural fit—something that the cross-border payments group TransferWise, another portfolio company of ours, resolved by sending a “landing team” from their European HQ over to the U.S., who could then make the first, crucial local hires.
Meanwhile, companies that see between 30% and 50% of their market in the U.S. need to maintain balance between the two continents. The company’s CEO might move to the U.S., but later in the company’s journey, it will be the base for some, not all, executive roles. Spotify falls into this group, with the States generating over a third of its revenues.
Lessons from Daniel Ek
After testing the waters in the U.S. and drawing back right at the start, because of financial constraints, Spotify ended up making its first U.S. hire in 2010. By then, the fact that it had shifted its commercial hub to London (while maintaining an R&D base in Stockholm) meant it had sufficient momentum that U.S. record labels appreciated its potential. “There’s a benefit to growing in concentric circles,” Daniel Ek, Spotify’s cofounder, told us. “If we hadn’t expanded via London and had come straight to the U.S., we’d be dead now.”
Businesses that aim to generate more than half their revenues from the States need to make U.S. success their new true north. Over time, many of these startups gravitate toward a setup where the bulk of R&D remains in Europe, but all the executives, the go-to market teams, and the CEO become based there.
Finally, newer distribution models, through app platforms and self-serve software, allow European companies to function like telescopes—zooming into the U.S. market and winning customers entirely remotely. Gaming companies like King, in which we’ve invested, as well as software company Pipedrive, have followed this model successfully. Strategic partnerships may be in the U.S., but the rest of the leadership team tends to stay in Europe.
All of this should give Europe’s most ambitious minds the confidence to go after the really audacious opportunities, without feeling the need to necessarily relocate the entire company to the States. It may still be the best option for some, but as our research shows, the stark difference between today and 15 years ago is that founders have choices, because Europe now has the money and the talent it needs to build massive companies.
This is no time for complacency. The U.S. will always hold a magnetic draw for many tech startups. But as the country reckons with deep structural, political, and economic uncertainties, Europe should seize its moment and encourage its culturally risk-averse corporates to “buy in” to the innovative products being built on their doorstep—fueling the next generation of truly transformative businesses and retaining their confidence to maintain operations on the continent.
Roughly a third of the global tech spend lies across the Atlantic. No future “global tech titan” can ignore such a large and influential market. But with new and more sophisticated ways to expand, long-held dreams that the next Amazon, Google, or Facebook is not only made, but stays, in Europe could at last become reality.
Danny Rimer is a partner at Index Ventures, a venture capital firm with offices and investments in the U.S. and Europe.


fortune--2020-10-01--High school debates function way better than what America saw Tuesday night

As someone who regularly uses clips from presidential debates in class to engage students, I can tell you that the behavior on that debate stage Tuesday night was unlike any I have seen in modern presidential campaigning (save for the 2016 presidential election). It was also unlike anything I have witnessed at high school and college debates and mock trial competitions.
If you were ever a participant on a debate team, chances are that you also cringed after only five minutes of the first presidential debate.
The structure of the debate was no different than presidential debates from years past. Each candidate would address a question put forth by the moderator for two minutes, one after the other, with additional follow-up time. While this quicker structure is different from what debate teams face across the country, the style is very similar.
The general rules of debate are that participants alternate in who is asked each question, and then respond to the points made by their opponent and offer their own arguments during their allotted time. There’s a level of decorum: You wait your turn, and you remain civil. But that’s not how the debate on Tuesday night progressed at all. The debate rules did not seem to matter, especially to President Donald Trump.
Before the 2016 election, it was typical to see candidates take the stage, greet each other, and be mostly respectful of the time constraints given to them. If we look at the most memorable moments in presidential debate history, they are usually when a candidate is given a chance to respond to points made by their opponents. Candidates typically jot down notes when their opponent discusses ideas and plans, and then when given a chance to respond, address points that were raised by their opponent and explain their own agenda.
To be fair, I went into the debate Tuesday expecting a few zingers and interruptions, especially from Trump given his debate performances in the past. While it is easy to forget, in the first presidential debate of 2016, Trump interrupted Hillary Clinton a record-setting 51 times. On that debate night, I remember being stunned at the way that debate was handled by both the candidates and the moderator. “Why can’t we mute his mic?” students asked me.
Even with this background heading into Tuesday, I did not expect the sheer number of times Trump would interrupt both former Vice President Joe Biden and Fox News anchor and debate moderator Chris Wallace. While estimates vary, it looks as though the candidates interrupted each other or Wallace at least 90 times in 90 minutes, with Trump leading the way with 71 interruptions (other estimates show Trump interrupting approximately 128 times).
What I want to be clear about is that this behavior is not normal. This is not normal for high school or college debate competitions; this is not normal for our presidential debates. In a high school debate or mock trial competition, students would be thrown out and disqualified for the behavior Trump displayed.
No other presidential candidate has ever not allowed another candidate to answer their questions. The last presidential debate without Trump as a candidate (2012) involved very few interruptions and two candidates who were cordial to one another on the stage, which is how it had always been (until now). President Barack Obama interrupted Sen. Mitt Romney only seven times, and Romney only interrupted Obama four.
Given the sheer number of interruptions, it should come as no surprise that people from both sides of the aisle are now clamoring for there to be stricter rules for the next two debates. On Wednesday, the Commission on Presidential Debates said it will soon adopt changes that will hopefully make what we witnessed Tuesday night a one-time affair, including possibly allowing the moderator to mute the mics of the participants when their opponents are talking.
At one time, journalists actually wanted to be a moderator for a presidential debate. Trump changed all of that. No one Tuesday night wanted to be in Wallace’s shoes. I think I speak for all of us when I say we really don’t want to sit through another debate like that again.
Let’s please bring back civility to our political discourse and hold our presidential candidates to the same level of professionalism that has been expected in years past.
Heather K. Evans is the John Morton Beaty professor of political science at the University of Virginia’s College at Wise.


fortune--2020-10-01--Palantir’s direct listing snafu

Palantir’s direct listing snafu

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Asana and Palantir walked into the spotlight Wednesday by going public through the fairly green process of a direct listing—on the same day, no less.
While shares of both companies ended the day above their private market values, some early Palantir investors may have had trouble cashing out due to tech issues, according to the Wall Street Journal.
A main premise of direct listings is that existing shareholders are able to cash out on their shares even while the company itself doesn’t raise funding.
But according to the WSJ, current and former employees struggled to sell their shares after the data-mining decacorn began trading at $10 a share at 1:40 p.m. ET. The problem, attributed to “technical difficulties” around Morgan Stanley’s equity management platform Shareworks, eased up over time and was resolved entirely about two hours later. But some still had trouble trading through the market’s close at 4:00 p.m. ET, when shares of Palantir had fallen to $9.50 apiece—missing out on the chance to cash out on the day’s high of $11.42.
A Shareworks spokesperson told the Journal that the system had experienced slowness, though call centers were still available to complete trades at the time. “We will work through any issue that is brought to our attention and ensure that no employee will be disadvantaged,” they said, with another source suggesting that those who sold shares at a lower price would somehow have them made whole.
Meanwhile, on Wednesday during Fortune’s Most Powerful Women Summit, New York Stock Exchange President Stacey Cunningham was asked if she thought the distant cousin of the direct listing process, the special purpose acquisition company, had staying power, given that the process boomed in ‘07 amid frothy markets and then faded. Her take? “The SPACs of yesteryear are nothing like the SPACs that are listing today,” she said to Fortune’s Jen Wiezcner.
COINBASE: After CEO Brian Armstrong wrote a controversial note saying the company would minimize any social activism work, the company is now apparently offering a severance package to those who don’t feel comfortable working with the company. Read more.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Cazoo, a U.K.-based online used car buying platform, raised £240 million ($310 million) of funding. General Catalyst and D1 Capital Partners led the round and were joined by Fidelity Management & Research Company and Blackrock.
- Sendinblue, a French marketing campaign startup for small businesses, raised $160 million in funding. Investors include Bridgepoint, Bpifrance, Blackrock, and Partech.
- SOPHiA GENETICS, a Switzerland-based clinical insights platform, raied $110 million in series F funding. aMoon led the round and was joined by investors including HItachi Ventures.
- Carmot Therapeutics, a Berkeley, Calif.-based biotech company focused on metabolic diseases, raised $47 million in series C funding. Investors include Amgen, The Column Group and Horizons Ventures.
- Papaya Global, an Israel-based payroll management platform,raised $40 million in funding. Scale Venture Partners led the round and was joined by investors including Workday Ventures, Access Industries, Insight Venture Partners, Bessemer Ventures Partners, New Era Ventures, Group 11, and Dynamic Loop.
- Inshorts, an India-based popular news aggregation app, raised $35 million. Addition led the round. Read more.
- Facet Wealth, a Baltimore, Md.-based fintech company, raised $25 million in Series B funding. Warburg Pincus led the round.
- Coralogix, a San Francisco-based log analytics firm, raised $25 million in Series B funding. Red Dot Capital Partners and O.G. Tech Ventures led the round and were joined by investors including Aleph VC, StageOne Ventures, Janvest Capital Partners, and 2B Angels.
- Pacaso, a San Francisco-based company for second home ownership launched by Zillow co-founder and former CEO Spencer Rascoff, raised $17 million in Series A funding. Maveron led the round and was joined by investors including Crosscut and Global Founders Capital.
- Bloomscape, a Detroit-based shipper of live plants, raised $15 million in Series B funding. General Catalyst led the round.
- Einride, a Swedish technology company that develops and provides freight transport solutions based on electric and autonomous vehicles, raised $10 million in new funding from investors including Norrsken VC, EQT Ventures, Nordic Ninja VC, and Ericsson Ventures.
- Bamboo Systems, a Cambridge U.K. and California, U.S.-based firm seeking to speed up computing, raised $7 million in funding. Seraphim Capital and Opea Holding led the round and were joined by investors including Future Fund.
- R-Zero, a San Francisco-based biosafety company that aims to reduce the spread of infectious disease, raised $15 million in Series A funding. DBL Partners led the round and was joined by investors including Bedrock Capital.
- Bykea, a Karachi, Pakistan-based on-demand transport and logistics platform, raised 13 million in Series B funding. Prosus Ventures led the round and was joined by investors including Middle East Venture Partners and Sarmayacar.
- Retirable, a New York-based company seeking to personalize the retirement investing process, raised $4.7 million. Vestigo Ventures led the round and was joined by investors including Diagram Ventures and Primetime Partners.
- Yotta, a New York-based maker of a prize-linked savings account which rewards customers saving money by entering them into weekly drawings, raised a $3.3 million in seed funding from Slow Ventures, FundersClub, TwentyTwo VC, Chapter One, and CapitalX.
- Sora, an Atlanta-based virtual high school platform, raised $2.7 million in seed funding Union Square Ventures led the round.
PRIVATE EQUITY
- Mubadala Investment Co. acquired a less than 5% in Silver Lake as the private equity firm develops a new strategy with a 25 year time horizon. Read more.
- Silver Lake co-investors plan to invest an additional 18.75 billion rupees ($260 million) into Reliance Retail Ventures, the retail arm of Reliance Industries. Read more.
- Argand acquired Cherry, a German-based designer and manufacturer of high precision keyboard switch technology. Financial terms weren't disclosed.
- Digital Fuel Capital acquired Seattle Coffee Gear, an omnichannel specialty retailer of coffee equipment and coffee beans. Financial terms weren't disclosed.
- Serent Capital invested in Actionstep, a New Zealand-founded provider of cloud-based legal practice management systems. Financial terms weren't disclosed.
- LFM Capital invested in Diamabrush, a Madison Heights, Mich.-based manufacturer of diamond abrasive brushes and replacement blades. Financial terms weren't disclosed.
- TA Associates completed a majority investment in Netwrix, an Irvine, Calif.-based cybersecurity vendor. Financial terms weren't disclosed.
OTHERS
- G4S, a British cybersecurity firm, rejected a $3.8 billion acquisition offer from smaller Canadian rival GardaWorld. Read more.
EXITS
- SAP plans to acquire Emarsys, a Vienna, Austria cloud-based marketing platform backed by Vector Capital. Financial terms weren't disclosed.
IPOs
- Datto, a Norwalk, Conn.-based provider of cloud-based data backup, filed for a $100 million IPO. The firm posted revenue of $458.8 million and a loss of $31.2 million in 2019. Vista backs the firm. Read more.
- Mission Produce, a California-based seller of avocados, raised $96 million in an offering of 8 million shares (22% insider sold) priced at $12 apiece. Read more.
- fuboTV, a New York-based sports streaming platform, plans to raise $150 million in an offering of 15 million shares priced between $9 to $11. Read more.
SPACS
- Hims, the online prescription drug startup, plans to go public via merger with Oaktree Acquisition Corp., a SPAC, in a deal that values the firm $1.6 billion. Founders Fund, Forerunner Ventures, IVP, Redpoint Ventures, Thrive Capital, McKesson Ventures, and CPPBIB back Hims Read more.
- Playboy Enterprises, the company behind Playboy, plans to go public via merger with Mountain Crest Acquisition Corp., a SPAC. The deal values the firm at $381 million.
- AEA-Bridges Impact Corp., a blank check company targeting an ESG businesses, raised $400 million.
- Altimeter Growth Corp., a blank check company from Altimeter Capital seeking a tech business, raised $450 million.


fortune--2020-10-01--Why Google’s $1 billion deal with news publishers isn’t the end of their war

Google has been at war with the news-publishing industry for most of the past decade, over the issue of whether the search giant should be paying fees to display snippets of articles in Google News.
On Thursday, it appeared a truce may have been struck. Google unveiled a new product called News Showcase, which will start life as a feature in the Google News app before spreading to its Discover and Search platforms “in the future.”
Showcase will “give participating publishers the ability to package the stories that appear within Google’s news products, providing deeper storytelling and more context through features like timelines, bullets, and related articles,” explained Google and Alphabet CEO Sundar Pichai in a blog post.
Crucially, Google will be paying the publishers for this content; it’s devoting $1 billion to the cause over the next three years.
“Both News Showcase and our financial investment—which will extend beyond the initial three years—are focused on contributing to the overall sustainability of our news partners around the world,” Pichai wrote.
Google says nearly 200 publications have signed up to participate in News Showcase, in Germany, Brazil, Argentina, Canada, the U.K., and Australia. There are some big names on the list, such as Handelsblatt, Der Spiegel, and Infobae.
But where’s Axel Springer?
Fighting for fees
The conservative German giant—publisher of mega-tabloid Bild and broadsheet Die Welt—is, along with Rupert Murdoch’s News Corp, one of Google’s most bitter critics when it comes to the issue of licensing. It hasn’t signed up for Google’s new initiative, and that says a lot.
Springer was the main driver behind a trailblazing 2013 German law that forced the likes of Google to pay for the use of snippets in Google News—in theory. In reality, Google responded by axing its use of snippets, instead delivering users just bland headlines. The move strangled the flow of traffic to Springer’s websites, so it relented, giving Google a temporary license to use snippets as it wished.
Spain followed the German example, but with a stricter version of the law that forced publishers to seek licensing fees from Google. As a result, Google shut down News in Spain.
However, news publishers’ relentless lobbying last year finally resulted in a new EU directive introducing the concept of such licensing (technically known as “ancillary copyright” licensing) across the bloc. The move affects not only Google but also Facebook, whose users are also used to seeing images and snippets from articles (and which last year struck a deal to pay some American publishers for their snippets).
EU member states will all have to turn the directive into national law by early July 2021, but France was quick off the starting blocks, taking mere months to come up with its ancillary copyright law. The result? Google stopped showing snippets of French publishers’ articles by default. The publishers took Google to the French competition authority, which this year told Google to enter into good-faith negotiations with them.
Germany has yet to implement its version of the new EU directive. And that is why Axel Springer and many others are sitting out Google’s $1 billion initiative for now; they don’t want to get locked into anything that might prejudice their ability to make the best of the incoming laws.
“Axel Springer is open to examine cooperations with Facebook, Google & Co., but only to the extent that they do not make it difficult or impossible to effectively exercise the Publisher’s Right,” a Springer spokesman told Fortune by email. “In this respect, we continue to work hard for an effective implementation of the EU Copyright Directive.”
A similar sentiment came from the European Publishers Council, an association that represents the likes of News Corp’s News UK, the Guardian…and Axel Springer. According to an EPC statement released Thursday, Google previously tried to get publishers to participate in News Showcase with a contract “saying that Google may terminate this agreement immediately if a publisher participates in or initiates a legal claim or complaint relating to Google or its Affiliates’ use of news content.”
“Many are quite cynical about Google’s perceived strategy. By launching their own product, they can dictate terms and conditions, undermine legislation designed to create conditions for a fair negotiation, while claiming they are helping to fund news production,” said EPC executive director Angela Mills Wade in the statement.
Lobbying continues
It will also be interesting to see what effect Google’s Thursday announcement has in Australia, where the company is engaging in a furious lobbying battle over a new “news media bargaining code” that will dictate how much Google and Facebook need to pay publishers.
Just this week, Google released a video featuring local comedian Greta Lee Jackson, in an effort to win the public over to its cause. In it, Jackson uses the analogy of a bus driver having to pay a restaurant owner to drop passengers off at their establishment. Google has also recently run a public campaign on its own site, warning Search users that “the way Aussies search every day is at risk from new government regulation.”
Google’s new, $1 billion wave of partnerships might have unprecedented scale—its existing News Initiative, which aims to help publishers come up with new digital models, is worth just $300 million—but it seems clear that it won’t be enough to settle all the disputes that continue to whirl away.
Also of note: No U.S. publishers have signed up for News Showcase yet. This definitely isn’t the end of the story.


fortune--2020-10-01--Startup IonQ drastically ups the quantum computing ante

IonQ says it has built the world’s most powerful quantum computer, as measured by a common industry metric.
On a machine featuring 32 qubits—the quantum equivalent of classical computing’s bits—IonQ says it has achieved “an expected” quantum volume greater than 4 million. The figure vaults ahead of the previous record: a quantum volume of 128 announced just one day prior by Honeywell, the industrial conglomerate.
Peter Chapman, IonQ’s chief executive, said that as the company releases newer iterations of its machines in the years ahead, updated measures will be required. “The number will become so large, we’ll have to leave quantum volume behind,” he said.
Quantum volume attempts to grade quantum computers on a combination of metrics, including a machine’s number of qubits, their “connectivity,” and error rates. IBM, a rival quantum computing pioneer, introduced the yardstick three years ago in an effort to create a more holistic ranking system for quantum computing engineers.
Qubits tend to be unstable, but in an ideal world each additional one adds exponential power to a quantum machine. Because of IonQ’s unique hardware design, it says it is able to tap into those exponential increases, helping push its machine far ahead of the pack, at least according to quantum volume.
IonQ is tilting against tech giants many times the company’s size, such as IBM, Google, Honeywell, Intel, and Microsoft. The five-year-old startup based in College Park, Md., is racing, like the others, to give businesses a computing edge in domains such as chemistry, financial modeling, medicine, and artificial intelligence.
The industry’s holy grail is to create general purpose quantum computers capable of solving presently incalculable problems. Google offered an early, arcane demonstration of the feat last year.
IonQ did not release detailed specifications for its new, turbocharged machine. Chris Monroe, IonQ’s cofounder and chief scientist, told Fortune the company would do so “in the coming months.”
A zoomed-in view of IonQ’s “ion trap” quantum computing technology. Credit: Kai Hudek, IonQ. Courtesy of IonQ.
In a preprint article posted on Sept. 24 to ArXiv, an online science database, a team of scientists including Monroe recently claimed to have achieved “error correction with gain” on a 13-qubit mahcine. The experiment, if verified, marks a quantum computing milestone—a drastic reduction in error for notoriously finicky qubits.
“It looks like at least very good research; I don’t know whether it is truly great research,” said Greg Kuperberg, a mathematician at the University of California at Davis who specializes in quantum theory. Until benchmarking data and additional feedback from the scientific community is available, Kuperberg said the announcement “puts me in wait-and-see mode.”
Tony Uttley, Honeywell’s quantum leader, said IonQ’s milestone validates the ion trap hardware approach that is being pursued by both Honeywell and IonQ. “That’s why trapped ion technology is so exciting, because you have the potential with this kind of high-fidelity system to be able to really rapidly increase the computational capability of these quantum computers.” (IBM and Google are, in contrast, developing “superconducting qubit” quantum computers, an entirely different technology.)
Even though IonQ and Honeywell are both pursuing ion trap quantum computers, there’s a big difference in the architectures. IonQ is creating “static array” machines where the atomic qubits essentially remain in place, while lasers, used to program circuits, move around. Honeywell, on the other hand, shuttles the atoms themselves around.
The difference in approach means that one company’s machine may be suited to certain quantum algorithms and operations, while another’s might be suited to a different set, says Christopher Savoie, CEO of Zapata Computing, a quantum software startup. It is difficult, if not impossible, he said, to judge one as better than another at this early stage of development.
“If you want an analogy, it feels like announcing a new sports car that could be very good, together with comments about specs like engine power as well as comments about customers, but before releasing a video or data of track performance,” Kuperberg said of IonQ’s machine.
Kuperberg and Scott Aaronson, a quantum computing expert at the University of Texas at Austin, said IonQ appeared to have made substantive quantum computing progress. Both scientists took issue, however, with the company’s description of having created “perfect” qubits.
Aaronson called the claim of perfection “obvious hyperbole” until the qubits’ capacity for full error-correction can be proved. Kuperberg similarly noted “they do not say what ‘low’ means when they say that the gate errors are low.”
CEO Chapman said IonQ would release a five-year product road map “in about six weeks or so.” The plan follows closely on the heels IBM’s hardware timeline release.
Customers of IonQ will soon be able to use the new machine in private “beta,” Chapman said. Through partnerships, the startup will offer customers of Amazon and Microsoft’s cloud computing businesses access by the first quarter of 2021, he said.


fortune--2020-10-01--The case for a virtual commute when working from home

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
Years after the introduction of the iPhone, Apple started to add safety features that did things such as making it difficult to drive and text. I discussed this with Tim Cook, Apple’s CEO, in 2017, as the iPhone was beginning its second decade. “I think that all companies should do that, to really think through how their products are used,” Cook said, of some of Apple’s new features. “Using a product is somewhat like eating healthy food. It’s really great. But you can eat too much of healthy food. And you can use something too much.”
We’re all finding out right now just how much is too much when it comes to technology. Twitter’s Jack Dorsey, for example, has acknowledged that the creators of the free-for-all messaging system simply didn’t envision all the ways its service would be used—and misused. My deep research into the history of the seat belt suggests that it took decades for car manufacturers to figure out they could add a feature to their vehicles to mitigate the danger of motoring.
I thought about all this while reading about Microsoft’s intention to add a “virtual commute” feature to its Teams communications product. At first blush, the idea of scheduling a commute into a work-from-home day seems silly. Think about it for a tick more, and it makes total sense. Using technology to ameliorate the burden of technology surrounding our new remote-working lives is a great example of a grafting on a solution after the fact.
Sure, commuting sucks sometimes. But the ability to pause and focus, or call loved ones, or listen to the radio, or daydream—anything, really, other than endure another Zoom (or Teams) call—helps the remote worker reset their brain.
In old Microsoft fashion, the software maker revealed the feature before launching it. In another era that was called vaporware. At least Microsoft has started a conversation.
***
Some things, on the other hand, are obvious right from the outset. Reading this week in The New York Times about how fees from The Apprentice, a TV show about fake business situations, kept Donald Trump afloat for years after his actual business enterprises had failed, I recalled an article I wrote in Fortune in 2004. I asked why audiences would want to learn business secrets from someone whose publicly traded business was publicly failing. “It’s clear that taking your business cues from The Donald is far more likely to lead to fame than to fortune,” I wrote.
Enough said.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Get yer ya-ya's out. The Googleplex offered a tight and succinct 30-minute debut of new products on Wednesday. Google offered an updated $50 Chromecast that works in 4K and has nifty software for sorting through all your streaming services (except Apple TV+ it appears). The new Pixel 4a 5G and Pixel 5 phones provide Google's usual great camera software and 5G connectivity at prices of $500 and $700, respectively. And the Nest Audio speaker is, you know, a new connected speaker. On Thursday morning, Microsoft unveiled two new Surface devices. The $550 Surface Laptop Go lowers the entry price considerably while a revised Surface X tablet saw few significant upgrades beyond a new processor option.
Pay to play. Speaking of Google, the company is moving to ease criticism from publishers with its latest news program, dubbed Google News Showcase. Google says it will pay $1 billion to news creators over three years to license stories for the service.
Denethor despairs in Minas Tirith. Silicon Valley stars Asana and Palantir listed their shares and started trading on Wednesday and all was well in the third age of stocks—well, pretty well. Workplace collaboration software maker Asana traded up 7% during the day and finished with a market valuation of $5.5 billion. Intel data analyzer Palantir traded down 5%, however, and ended with a value of $21 billion.
The unraveling. Troubled emission-free truck maker Nikola Motor has been on a rollercoaster this week. First it postponed the debut of its electric pickup truck, the Badger, and CNBC said two women had come forward accusing founder Trevor Milton of sexual assault. Nikola stock dropped 7% on Tuesday. Then General Motors, which is supposed to manufacture the EV pickup in return for a stake in the company, was rumored to be investing more money and Nikola said Bosch and others had already invested. Nikola shares jumped 15% on Wednesday and another 7% in pre-market trading on Thursday.
A certain relish for confusion. Scientists at MIT say they've got a promising design for a fusion reactor (the kind of nuclear reactor that produces power but no nasty radioactive waste) called Sparc and they just need three or four years to build it. Such a breakthrough could help solve global climate change—if it works out.
FOOD FOR THOUGHT
If you were worried that the A.I. writing app known as GPT-3 might take your job, Chand Rajendra-Nicolucci, a research fellow at Columbia's Knight First Amendment Institute, has another reason for you to freak out. In an essay for Slate, Rajendra-Nicolucci explains how the A.I. tool could be used for online harassment.
For example, a sophisticated language model could target harassment to specific speakers, making it more threatening and convincing. There have already been examples of GPT-3 creating mock obituaries that include accurate references to people’s past employers and current family members, which suggests it could be used to generate harassment that’s just as personal. Activists and journalists targeted by harassment often say they can tell the difference between “real” harassment and bot harassment, citing differentiators such as the frequency of posts and the coherence of the content. Models like GPT-3 could make it more difficult to tell the difference, making automated harassment more believable and thus more chilling.
In addition to targeted harassment, those looking to control public debate use a technique called “flooding” to drown out speech they object to and distort the information environment. Flooding involves producing a significant amount of content to distract, confuse, and discredit.
IN CASE YOU MISSED IT
Employer review site Glassdoor adds diversity and inclusion ranking By Jeremy Kahn
What Silicon Valley needs from the 2020 election By Danielle Abril
Stock market SPACs are here to stay, says NYSE’s Stacey Cunningham By Lucinda Shen
Tesla’s biggest profit center is dangerously close to running out of power By Shawn Tully
Accenture CEO Julie Sweet tells companies to get out of the COVID ‘crisis mode’ By Aaron Pressman
How the COO of Zoom is handling the responsibility of powering work from home By Brett Haensel
As Palantir goes public, consider its troubling human rights record By Denise Bell and Michael Kleinman
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
You may have missed the innovative turn in Marvel Comics' character Ms. Marvel a few years ago when the publisher decided to reboot the superhero as a Pakistani-American teenager from Jersey City. Worth a read. Now Marvel and Disney are planning a TV series and announced they've cast 18-year-old actress Iman Vellani in the lead role. Vellani will also likely take the role into future Marvel movies. That should embiggen the fun, as Ms. Marvel might say.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-10-01--The White House unveils a new stimulus package with $400 weekly unemployment benefits and $1,200 che

The White House unveils a new stimulus package with $400 weekly unemployment benefits and $1,200 checks

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During a closed-door meeting on Wednesday, Treasury Secretary Steven Mnuchin offered House Speaker Nancy Pelosi the White House’s biggest stimulus offer yet.
The White House upped its stimulus offer from $1.3 trillion to $1.6 trillion. That’s still below the $2.2 trillion that Democratic leaders are requesting, but sufficient enough for Pelosi to delay a Wednesday vote on the revised $2.2 trillion Heroes Act as the two parties continue negotiations.
The Republican offer would provide $400 weekly enhanced unemployment benefits, paid on top of state benefits and retroactively from the week ended Sept. 12 and continuing until the week ending Jan. 1, 2021, according to Roll Call. That would replace the $300 weekly benefits that President Donald Trump issued through a memorandum in August, which were exhausted in September.
That’s less than the $600 weekly unemployment benefit included in the Democrats’ proposed $2.2 trillion Heroes Act. However, the $400 benefit is double the $200 per week that Senate Republicans proposed back in July.
The White House stimulus offer would also provide $250 billion for state and local governments, according to Roll Call. House Democrats are requesting more than $430 billion for state and local governments.
And the latest White House offer would set aside $150 billion for education, $75 billion for coronavirus-related projects, $60 billion for mortgage and rental assistance, and $15 billion for food programs.
If a stimulus package is to materialize, both parties on Wednesday reaffirmed it would include another round of $1,200 stimulus checks for adults and $500 for dependents.
But if a stimulus compromise doesn’t come to fruition on Thursday, House Democrats are likely to vote on the $2.2 trillion Heroes Act—which is opposed by Republicans and unlikely to get signed into law.
Why pass the $2.2 trillion Heroes Act if it has no chance of becoming law? It gives Democratic representatives a talking point as they go home during the October recess to campaign. Meanwhile, vulnerable Senate Republicans will go home without having passed another stimulus bill since the spring.


fortune--2020-10-01--Microsoft offers cheapest Surface laptop yet to take on Chromebooks

Microsoft added a new, cheaper laptop to its well-regarded Surface lineup, entering the low end of the PC market as the pandemic has stirred demand from consumers working and learning from home.
The Surface Laptop Go starts at just $550 and includes a 12.4-inch touch screen, a fingerprint sensor for logging in, and Intel’s older 10th-generation processor. The laptop is available for preorder, with deliveries starting Oct. 13. Previously, the cheapest Surface laptop was the 13.5-inch Surface Laptop 3, which starts at $1,000.
“The idea of working and learning from home, which at one point felt temporary, has for many of us started to feel more permanent,” Pete Kyriacou, vice president for the Surface effort at Microsoft, said in a statement. “Our goal is to design a Surface for every person, work style, and location, offering a variety of designs, colors, and price points.”
Microsoft’s Surface Laptop Go starts at $550 and offers a 12.4-inch touch screen. Courtesy of Microsoft
The announcement comes as the pandemic has boosted sales of all kinds of laptops, but particularly the cheaper Chromebook running Google’s Chrome operating system. Sales of Chromebooks increased 60% in the six months of March through August compared with the same period in 2019, while Windows laptop sales rose 40%, NPD Group said. But consumers typically spend about half as much on a Chromebook as on a Windows PC, the research firm noted. The cheaper device from Microsoft also comes ahead of Apple’s expected announcement of its first laptop using its own processor design, rumored to be a low-priced MacBook.
Microsoft also offered a minor update of its cool-looking but poorly reviewed Surface X tablet, which runs Windows on a custom ARM chip instead of a typical Intel processor. The 2020 version of the 13-inch tablet has the same starting price of $1,000 and the same design, with a thickness of just 7.3 millimeters, or 0.28 inches. It now comes in a platinum-colored case as well as the original black.
One of the biggest criticisms of the original model, released a year ago, was slow performance from the SQ1 chip, a proprietary Microsoft design based on Qualcomm’s Snapdragon 8cx. Microsoft said it had made software improvements to boost performance and offered a faster chip, dubbed the SQ2, in higher-end versions of the 2020 model.
Microsoft didn’t say much about the new SQ2 and declined to offer any performance benchmarks for the processor, or even compare it to the SQ1. The company said only that the SQ2 is the fastest chip available for running Windows on ARM, a narrow category with few contenders.


fortune--2020-10-01--Incoming Citi CEO Jane Fraser says she’s proof that working part-time isn’t a career killer

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! Congresswomen drill CEOs on drug pricing, Hillary Clinton debuts her podcast, and incoming Citi CEO reflects on the most critical moments of her career. Have a powerful Thursday.
– ‘Just relax, chill, take a step back.’ Jane Fraser is set to become the first female CEO of a major U.S. bank in February when she takes the helm of $103 billion Citi. So the advice she offered at the Fortune Most Powerful Women Summit yesterday might seem counterintuitive: chill.
Fraser, whose appointment to CEO last month broke Wall Street’s stubborn glass ceiling, said that instruction was instrumental earlier in her career when she felt the need to go all-in at home and at work. “I think the best piece of advice I got was: Why am I in such a hurry?” Fraser told me. “I remember one of my mentors saying to me, ‘Jane, you’re going to have several careers in your life, and your careers are going to be measured in decades, so why this sense of rush and trying to have everything at the same time? Just relax, chill, take a step back and enjoy the process more, and enjoy the different phases of your life.’”
For that reason, Fraser chose to work part-time after being named a partner at consulting firm McKinsey, her previous employer. That decision to carve out “precious” time with her kids was critical to her later professional achievements. “I’m so glad I did it,” she said. “I honestly don’t think I would be here today if I hadn’t.”
At the same time, Fraser says she understands the hesitancy that some working parents might feel about taking a step back from work. She hopes her own experience proves that unorthodox or more flexible work arrangements are not career-enders.
“I’m an example that it doesn’t need to sidetrack you from the longer-term goals” she said.
Another crucial career juncture was Fraser’s decision to accept the role of running strategy for Citi at the beginning of the financial crisis. She was initially uncomfortable with idea of taking the job, but heeded a friend’s advice to overcome the fear of failure. From there, Fraser got “hooked on stretch roles,” she said, “because you do learn so much.”
The 2020 MPW Summit will wrap up today with conversations with Magic Leap CEO Peggy Johnson, IBM executive chairman Ginni Rometty, Sam’s Club CEO Kathryn McLay, and more, including a special remembrance of Justice Ruth Bader Ginsburg. We’ll have the scoop from Day 3 tomorrow; there are more highlights from Day 2 below.
Claire Zillman
claire.zillman@fortune.com
@clairezillman
Today’s Broadsheet was curated by Emma Hinchliffe.
MORE FROM THE MPW SUMMIT
- East and West. Hong Kong is caught in a "difficult situation" as its status as bridge between East and West is threatened by tensions between Washington and Beijing. Hong Kong stock exchange chair Laura Cha discussed the city's future with Claire: Fortune
- The CEO next door. Addressing the mental and emotional toll of social isolation could be society's major achievement this decade, Nextdoor CEO Sarah Friar said. She keeps that goal in mind while building local community through the social platform: Fortune
- Ultimate adviser. Companies need to get out of "crisis mode" says Accenture CEO Julie Sweet. That's the advice she's given businesses throughout the pandemic. Fortune
- Savings shortages. The coronavirus pandemic will have several long-term consequences, including on how people can—or can't—save for retirement. "This is going to have a longer lasting effect as people rebuild retirement and frankly rethink retirement," said Edward Jones managing partner Penny Pennington. Fortune
- IPO no-gos. Goldman Sachs CEO David Solomon returned to the MPW Summit to discuss the business repercussions of the bank's decision not to take companies public if they have no non-white male directors. "We've really learned that by setting very specific, aspirational goals and then holding people accountable with great transparency, you can advance forward," he said. Fortune
MOVERS AND SHAKERS: Tertill Corporation hired former iRobot Corp president Helen Greiner as CEO and chairman. Goldman Sachs promoted chief strategy officer Stephanie Cohen to co-head of the bank's consumer banking and wealth management division. PayPal promoted VP of investor relations Gabrielle Rabinovitch to VP of corporate finance and investor relations. American Express's Colleen Taylor and former Verizon Media CMO Allie Kline joined Bill.com's board of directors. Elizabeth Cahn Goodman, EVP of government affairs and innovation at America's Health Insurance Plans, joins the board of directors at Healthify. Barbara Williams joins Allianz Global Corporate and Specialty as head of finance in Canada.
ALSO IN THE HEADLINES
- Better boards. California Gov. Gavin Newsom signed the state's legislation requiring companies headquartered there to have at least one nonwhite member of their boards of directors. The racial diversity law builds on the state's pioneering gender diversity boards rule. Wall Street Journal
- Democratic values. The European Commission published an audit of the rule of law in the bloc, under the leadership of VP for values and transparency Vera Jourova. The report determined that the union has failed to prevent the erosion of democratic values in some member states—including Hungary and Poland—despite its founding as a "club of democracies." Washington Post
- Price is wrong. Reps. Katie Porter, Rashida Tlaib, and Ayanna Pressley grilled pharma CEOs from Teva, Celgene, and Bristol-Myers Squibb on investigations into drug pricing. "The drug didn’t get any better, the cancer patients didn’t get any better, you just got better at making money, you just refined your skills at price gouging," Porter told former Celgene CEO Mark Alles. STAT News
- Listen up. The first episode of Hillary Clinton's podcast is out today, featuring a conversation with Sen. Kamala Harris. The former presidential candidate and current Democratic veep nominee spent part of their discussion mourning Justice Ruth Bader Ginsburg. Glamour
ON MY RADAR
Rihanna on working from home, dressing for Zoom, and Savage x Fenty’s epic new show Vogue
Joanna Coles' blank check firm aims to raise $300 million in IPO Reuters
Lillian Brown, makeup artist to nine presidents, dies at 106 New York Times
PARTING WORDS
"This is not something any one tech company, nor tech companies together, can really solve alone."
- Google for Education VP Avni Shah, speaking at the Fortune Most Powerful Women Summit, on K-12 education during the pandemic


fortune--2020-10-01--Jane Fraser’s priorities as incoming Citi CEO

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
The next CEO of Citi, Jane Fraser—who will become the first woman to head a big Wall Street bank—was interviewed by Fortune’s Claire Zillman on the virtual stage at the Most Powerful Women Summit yesterday, and provided an early look at her priorities for when she assumes the top job in February.
“The priorities will be fairly simple ones. We will be, as you say, in quite challenging times. The critical piece will be saying: What has changed in the world? What is the new normal? What is the future of work? Where will people be working? Digital transformation has been supercharged. What does that mean for business models of the future? There will be quite a lot on the plate.”
Add to that the main course, which will be figuring out how banks make money in an environment of insanely low interest rates and sluggish growth. Reflecting that concern, Citi’s stock has dropped close to 50% since the first of the year. Fraser has broken the glass ceiling, but still faces a challenge in avoiding the glass cliff.
Also on the MPW stage yesterday was the NYSE’s Stacey Cunningham, who said September is now set to be the biggest month for IPOs that “literally, we have ever had.” Topping the list are Palantir and Asana, which both began trading yesterday. Palantir, the government-friendly data mining firm, opened at $10 a share, giving it an amazing $22 billion valuation. Asana, a collaboration software firm founded by Facebook co-founder Dustin Moskovitz, began trading at $27, for a $4.1 billion valuation.
Separately, thanks to MO, PA and SG, who all correctly wrote in to take me to task for missing the most inflammatory quote from Tuesday’s presidential debate: President Trump’s “Proud Boys, stand back and stand by.” I hadn’t fully heard that in the chaos of the debate, and I didn’t immediately recognize its significance. On Wednesday, the President said: “I don’t know who the Proud Boys are. Whoever they are, they need to stand down.” But by that time, the extremist group had been celebrating the President’s acknowledgement on social media for hours.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Airline cuts
American Airlines and United will tentatively move ahead with plans to shed a whopping 32,000 jobs in total, due to lawmakers' inability to agree to a broad coronavirus relief package. "We implore our elected leaders to reach a compromise, get a deal done now, and save jobs," said United, which will put 13,400 people out of work as of today. American has given the government a few days to approve aid, otherwise it won't bring back 19,000 workers. Wall Street Journal
Rolls-Royce cash
The aviation downturn has hit engine maker Rolls-Royce, which now says it will need to raise £5 billion ($6.5 billion) to shore up its finances. Two billion pounds will come via a rights issue—which may unlock more cash from the British government—and the remainder from the issuance of new bonds. Reminder: Rolls-Royce has a market cap of just £2.5 billion. Reuters
Tokyo glitch
The Tokyo Stock Exchange halted trading today because of a "system glitch," in the words of Japan Exchange Group, which isn't sure when trading can resume. It's the exchange's worst-ever breakdown, and the first to stop trading for a whole day. New York Times
WFH rights
The German government will push ahead with plans to introduce a legal right to work from home, when possible, and to limit home-working hours. Labor minister Hubertus Heil says the move will reinforce workers' rights and work-life balance. Critics say the idea could weaken workers' ability to engage in collective bargaining. Heil: "The question is how we can turn technological progress, new business models and higher productivity into progress not only for a few, but for many people. How do we turn technological progress into social progress?" Fortune
AROUND THE WATER COOLER
Election package
Fortune has put together an in-depth package of articles examining what next month's election means for a wide range of industries, from Wall Street to Silicon Valley, and for the American people, whether they be small business owners, unemployed, working parents, or union members. Fortune
Brexit fallout
EY reports that financial services companies operating in the U.K. have so far shifted $1.6 trillion in assets, plus around 7,500 workers, to the European Union ahead of the end-of-year implementation of Brexit. As there is no trade deal with the EU yet, there's a good chance that financial services firms in London will lose their ability to serve customers in the EU. Fortune
Palantir concerns
Amnesty International USA's Denise Bell and Michael Kleinman write for Fortune that prospective investors in newly-listed Palantir (see above) should take into account the fact that the company is likely contributing to human rights violations by clients such as ICE and the Department of Homeland Security. They write: "ICE used Palantir technology in operations resulting in family separation and raids, in turn leading to detention in harmful conditions and oftentimes deportation. This happened so much that Palantir’s own employees have protested its activities." Fortune
Subway ruling
Whatever Subway uses to encase its sandwich fillings, it ain't bread. That's according to no less an authority than the Irish Supreme Court, which ruled on the bread-or-not issue in a tax dispute. The court said the substance didn't even count as a staple food—which would have exempted it from sales tax—because it had five times the mandated sugar limit. Guardian
This edition of CEO Daily was edited by David Meyer.


fortune--2020-10-01--Working from home could become a legal right in Germany

The German government is set to push forward with a controversial proposal that would give people the legal right to work from home where possible.
As in many other places, the coronavirus pandemic has seen a massive shift to home working in Germany. Around 18% of employees were already regularly working from home, but, when the crisis hit, that proportion more than doubled, according to a study by health insurance company DAK that found most workers saw the shift as boosting productivity and improving their work-life balance.
Labor minister Hubertus Heil told the Financial Times that a right to work from home was needed to “turn technological progress into social progress,” and a draft law would be proposed in the next few weeks.
“The question is how we can turn technological progress, new business models and higher productivity into progress not only for a few, but for many people,” he said.
“Sheer nonsense”
The draft law will likely face serious headwinds.
Germany is ruled by a coalition between Chancellor Angela Merkel’s center-right Christian Democrats (CDU) and the center-left Social Democrats (SPD). Heil is SPD, and some in the CDU expressed deep skepticism about his idea when he floated it earlier this year.
Last month, the labor minister in Germany’s most populous state, North Rhine-Westphalia, said it should be left up to employers to decide where their employees work. “I don’t think that [home working] can be prescribed by law,” said Karl Josef-Laumann, a CDU member.
CDU lawmaker Jana Schimke said something similar in July, when she warned that such a move would just “create more bureaucracy” for employers, who are in any case increasingly adopting mobile working practices.
Meanwhile, Ingo Kramer, president of Germany’s federal employers’ association (BDA), in June described Heil’s proposal as “sheer nonsense” and warned that it would just lead to more outsourcing.
However, the Greens—who are polling above the SPD and may well be part of the next coalition come next year’s election—submitted a parliamentary resolution in June that backed the idea of home working.
The far-right Alternative for Germany (AfD), which is currently the official opposition, said when Heil first floated the plan that it could lead to greater exploitation of workers, because it did not give workers the right to not be available at all times.
Bearing the cost
Heil told the FT this week that the draft law will in fact also regulate the working hours of those who choose to work from home. He also said the proposal would protect collective bargaining rights, which some had suggested might be threatened by the shift.
Germany’s biggest union, IG Metall, said last month that its research showed most people wanted to be able to choose when to work from home and when to work in the office, but they also wanted clear rules about things like the provision of IT equipment and office chairs. “The employer has to bear the cost for this,” the union said.
Germany is not the only country that’s reacting to the realities of the pandemic by ushering in new regulations on remote working.
In Spain, the government, unions and business associations struck a deal a couple weeks ago that says companies must cover the costs of equipping workers to do their jobs from home, and that guarantees flexible working schedules for home workers. Ireland is also drawing up remote-working guidelines.
France already introduced a law in 2017 that gives workers the right to disconnect when outside working hours.


fortune--2020-10-01--BlackRock’s action on climate change doesn’t match CEO Larry Fink’s pledge

At the top of the year, BlackRock CEO Larry Fink made a bold claim.
“Climate risk is investment risk,” Fink said in his annual letter to CEOs, pledging that BlackRock—the world’s largest asset manager—would begin holding portfolio companies to account on climate change.
According to the latest research from Morningstar, Fink has not been as good as his word. In the year to date, BlackRock has voted against 86% of shareholder resolutions that requested companies disclose climate change risk.
That’s a significant bump from the 75% of climate resolutions the fund opposed last year—the first year BlackRock’s assent entered double digits. In 2017 and 2018, the group opposed 96% and 94% of climate resolutions, respectively, according to Morningstar’s report.
American Funds was the only other asset manager of five tracked by Morningstar that saw a decline in the number of climate resolutions it approved. Fidelity, State Street and Vanguard all increased the number of resolutions they approved, with the first two voting “for” on the majority of proposals.
“With their massive amounts of money under management, these firms are often among the largest shareholders at many of the world’s biggest companies. Their yay or nay votes frequently make the difference between a shareholder proposal passing or failing,” the report authors said.
In a separate report released this month, Majority Action—a non-profit that advocates shareholder activism—likewise found that BlackRock had “undermined” shareholder efforts to put climate change on the agenda, voting in favor of just 8% of climate change resolutions.
BlackRock maintains it is taking action. In July, BlackRock said it had taken “voting action” against 53 companies that had made “insufficient progress on integrating climate risk into their business models or disclosures.” A further 191 were placed “on watch,” meaning they face the threat of voting action next year.
But shareholder resolutions on climate risk disclosure are in decline. Only 14 were filed this year, compared to 16 last year. Morningstar says the decline reflects, in part, “growing hostility” from the Securities and Exchange Commission towards climate change disclosures—likely referring to the SEC’s August update on the so-called Regulation S-K.
Regulation S-K lays out reporting requirements for public companies. In late August, an update to the regulation passed the SEC commission with two of five commissioners dissenting, lambasting the amendment for falling “silent” on climate change.
“By some estimates, over 90% of U.S. equities by market capitalization are exposed to material financial impact from climate change,” dissenting commissioner Allison Herren Lee said.
“We are long past the point at which it can be credibly asserted that climate risk is not material.”
More below
Eamon Barrett
-eamon.barrett@fortune.com
CARBON COPY
Existential threat
Russia’s state-backed oil giant Rosneft has said oil majors—such as BP and Shell—moving away from oil and gas and investing more in renewables is posing an “existential threat” to oil supply. Rosneft argues that state-owned oil companies will be required to step in and refill the supply deficit if private companies continue to divest.
9,000
Royal Dutch Shell said it will cut up to 9,000 jobs by 2022 as the company responds to a massive slump in earnings caused by the pandemic-era collapse in oil demand. Shell, which employs 83,000 people worldwide, saw income drop 82% in the second quarter, after a 46% fall in the first.
After the deluge
In the wake of the torrent of carbon emission pledges released by corporations this year, Quartz has put together a short and neat guide for assessing whether any hold water. Timeline, scope and transparency are all key indicators.
Carbon circular
The G20 energy ministers released a statement Monday committing to stabilizing energy markets by providing bailouts for fossil fuel firms hit by the pandemic. Although the communique does mention the importance of reducing greenhouse gas emissions, it also puts emphasis on creating “circular carbon economies,” which will rely on advances in carbon capture technology.
Mangroves
Brazil’s National Environment Council, known as Conama, voted Monday to overturn measures that had protected the tropical mangrove ecosystems along Brazil's coastline as "permanent preservation areas" and restricted commercial development projects.
Safety net
Researchers have drawn up a map for creating a planetary “safety net” of protected land to ensure global biodiversity, after the UN recently found its members failed to fully achieve any of the 20 biodiversity targets agreed upon in 2010. The “safety net” requires protecting some 50% of the Earth’s land—a leap from the current 15%.
IN CASE YOU MISSED IT
As seawater moves inland, ‘ghost forests’ are spreading. Why that’s so scary by Katherine Dunn
Climate action: Fear hasn’t motivated people, so let’s get them excited by Adam Met
Plastic-eating ‘Pac-men’: Researchers say enzyme cocktail could revolutionize recycling by David Meyer
China’s ambitious new climate goals mean it must completely phase out coal by 2050 by Naomi Xu Elegant
China pledges to be carbon neutral—but remains addicted to coal by Naomi Xu Elegant
To meet net zero emissions targets, China—and the rest of the world—needs these technologies by Katherine Dunn
BP is laying out its vision for a low-carbon future. Investors are skeptical by Katherine Dunn
CLOSING NUMBER
1%
Filed under unsurprising news: research from Oxfam finds that the wealthiest 1% of the world’s population creates more than double the amount of carbon emissions as the poorest 50%. The richest 10% account for 52% of the world’s emissions. The richest 10%, by the way, are those with incomes above $35,000 a year.


fortune--2020-10-02--Traders warn of a markets correction, sinking dollar in the wake of Trump COVID diagnosis

The White House unveils a new stimulus package with $ 400 weekly unemployment benefits and $ 1,200 checks

Intense volatility, a stock slump and more delays on a stimulus package are some of outcomes investors are considering after President Donald Trump tested positive for Covid-19.
Trump’s diagnosis adds another element of uncertainty to a market that’s already been sizing up the potential for a legal battle or political chaos after the Nov. 3 vote. Now, investors are contending with the possibility of Trump’s ill health and how it could affect the U.S. government.
“The market move is less about the election and more about the possibility that the U.S. president might become incapacitated,” said David Stubbs, head of markets strategy at J.P. MorganInternational Private Bank. “This would inject significant uncertainty into the policy and geo-political outlook. That is clearly a risk-off event and markets are acting as such.”
While markets were broadly lower on Friday, the retreat was calm and orderly. U.S. equity futures slumped 1.6%, with smaller declines in Asian and European stocks. The Chicago Board Options Exchange Volatility Index rose to 29, reaching the highest level in only a week. Haven assets, such as the dollar and gold, were largely steady.
Other investors said Trump’s positive test would largely be a non-issue for markets in the longer term, especially if he shows no symptoms.
This is what other investors are saying:
10% Correction
“This will induce nervousness in the markets and we could see a 10% correction in U.S. equities that will likely drag down Asian equities for the balance of the year,” said Gary Dugan, chief executive officer at Global CIO Office.
“Longer-term, people will see a sharper contrast between Asian and U.S. equities. Asia has political stability and strong technology companies in the north. For people looking to allocate globally, this just makes Asia more attractive.”
Rebound Potential
“If Trump is just positive but not ill, markets could rebound,” said Patrice Gautry, chief economist at UBP in Geneva. “U.S. institutions are solid and Vice President Pence should lead campaign and affairs if needed.”
“Trump may continue to manage from the White House, so economically the damages are limited as long as he is just positive but not really ill.”
Election Day uncertainty
“It throws a spanner into the works ahead of what is already a divided and bitterly fought election campaign,” said Paul Craig, portfolio manager at Quilter Investors.
“Mega-cap valuations in the U.S. remain stretched, so any bit of news that increases that uncertainty is ultimately going to weigh on market sentiment.”
No Lasting Issue
“I can’t see President Trump’s positive test being a lasting issue for markets past the initial shock, which is now subsiding,” said Roger Jones, head of equities at London & Capital.
“The only way this could develop into an issue is if the election has to be postponed, then there might be a big public reaction,” he said. “However, there is over one month to election day, so it seems improbable.”
Hedge Against S&P
“Investors should hedge themselves against S&P,” said Justin Tang, the head of Asian research at United First Partners in Singapore. “Most people may still be having their hedges on given what happened in March. A lot depends on what happens in next seven days.”
“If Trump goes to ICU, it is going to be a big problem but if he is asymptomatic that volatility may get contained.”
Stimulus Question
“Markets will doubtless take fright from news of the President’s illness,” said Russ Mould, investment director at AJ Bell. “It may further decrease the chances of a stimulus package passing through Congress in the immediate future.”
“Since markets are hoping for more stimulus, fiscal or monetary, its absence will be a concern, given the still-fragile nature of the recovery,” he said.
Dollar Weakness
“This will further lead to dollar weakness as it comes on top of the likely prospect that U.S. stimulus package won’t get approval until after the election,” said Jun Kato, chief market analyst at Shinkin Asset Management. “This may also pressure the Fed to deliver a more dovish tone that would cap U.S. yields and weigh on the dollar.”
The yen may climb to 104 per dollar, Kato said.


fortune--2020-10-02--Oil prices sink as Trump’s COVID diagnosis rocks global markets

Amid the market turmoil, oil prices sank Friday morning during European trade, as President Trump’s positive test for COVID-19 weighed on investors at a time when crude prices are already struggling with excess supply.
While equities stabilized somewhat, crude fell, and kept falling.
Mid-morning on Friday, London time, both the Brent and WTI contracts were down about 3%, with the global benchmark, Brent, dipping below $40, at $39.77 per barrel. Both contracts are down more than 30% since the start of the year.
Trump’s positive test comes after White House aide Hope Hicks tested positive for the virus. The President and First Lady will now self-quarantine, although the status of the President’s symptoms is unclear.
Friday’s news adds to mounting uncertainty hanging over the oil markets, a proxy for the health of the global economy. Rolling lockdowns in the spring led to an initial hit in demand, while the ensuing financial crash dented demand for oil and gas to a degree that is without precedent.
This year, the International Energy Agency expects oil demand to fall by 8.4 million barrels per day compared with last year, a record drop. In fact, in September the IEA revised its expectations for demand downward, reversing earlier expectations that demand was recovering.
Meanwhile, as the death toll has surpassed 1 million and lockdowns are once again on the horizon from Jakarta to Madrid, long-term concerns about oil demand are mounting.
“The oil market is struggling to interpret the continuous rise of COVID-19 infections and the fact that total [deaths] exceeded 1 million this week,” said Rystad Energy senior oil markets analyst Paola Rodriguez-Masiu in a note on Thursday. “It is a scary number, and although we are now used to worsening pandemic news, such a milestone is not one to brush off easily.”
Meanwhile, oil output from the OPEC group of oil producers rose in September to 160,000 barrels per day, according to a monthly Reuters survey, after output was tightened earlier this year in an effort to keep prices balanced.
In other words, more oil supply has been added to a world that needs it less.
It’s been a tumultuous week for the oil and gas industry all around. On Wednesday, Shell announced it would lay off up to 9,000 workers by 2022, pitching the cuts as part of its targets to reach net-zero emissions by 2050, which will require a vast restructuring of its assets toward low-carbon projects.
And there are signs that oil demand may never return to its pre-pandemic levels. Earlier this month, S&P Global Platts predicted that the hit to the global economy and the change in consumer behavior because of the pandemic had reduced long-term oil demand by 2.5 million barrels per day.
All that bodes poorly for oil prices, which are expected to remain depressed until the end of 2021.


fortune--2020-10-02--Americans increasingly want CEOs to take a stand on important social issues

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
Just Capital, the organization funded by hedge fund billionaire Paul Tudor Jones, is out this morning with its annual survey, which captures the views of 17,000 Americans about what makes a “just” corporation. The group then uses these poll results to form the metrics that guide its annual ranking of companies.
A couple of interesting changes from previous years:
Nearly 70% of Americans want CEOs to take a stand on important social issues, up almost 10% from a year ago.
37% of Americans believe companies are prioritizing workers this year, up 17 percentage points from last year.
87% of Americans believe their actions can shape the future course of business—up 16 percentage points over the last four years.
But in spite of these positive trends, there is still a large gap between what Americans expect from their corporations, and what they believe they are getting. Some 92% say they want large companies “to promote an economy that serves all Americans,” but only 50% believe large companies are currently delivering on that goal.
The CEO of Just Capital, Martin Whitaker, gave his assessment of the survey results in this piece for Fortune. His conclusion is worth noting:
“This is not about playing politics or prioritizing social activism over making money. It’s about building stronger, better businesses that give ordinary hard-working people the opportunities they deserve, that sustain our sense of community, that restores faith and trust in markets, and that ultimately provide a path to upwards economic mobility that, right now, feels out of reach for so many.”
More news below. And take a moment to read Geoff Colvin’s piece on what CEOs really want from the election.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Trump infected
President Trump and first lady Melania Trump both have COVID-19. The news, which has knocked U.S. futures, came shortly after it was revealed that the couple had both gone into quarantine, due to the positive diagnosis of advisor Hope Hicks. "We will get through this TOGETHER," the President tweeted. Trump is of course in a high-risk group when it comes to COVID, as he is both elderly and obese. It is not yet known whether or not he is symptomatic. Fortune
Amazon infections
Amazon has become the largest company to disclose how many of its employees have tested positive for the novel coronavirus. And the magic number is… 19,000, which Amazon says it less than it expected. The company has built its own testing labs for workers, and has called on its peers to release infection data. Wall Street Journal
EU suit
The European Union has launched legal action against the U.K. over its attempt to override the Brexit withdrawal agreement (an international treaty, signed just this year) with a new British law that could ultimately lead to a hard border between Northern Ireland and the Republic of Ireland. However, the move does not mean the Brexit trade talks, which have to bear fruit this month if a deal is to materialize by year end, are off. Washington Post
U.S. stimulus
The House of Representatives yesterday voted through a $2.2 trillion Democratic plan for coronavirus stimulus. It was quite tight, with 18 Democrats voting against the measure (the final tally was 214-207.) Anyhow, it's unlikely to clear to the Republican Senate. CNBC
AROUND THE WATER COOLER
Google News
Google has unveiled a new, $1 billion initiative that will see the company pay news publishers for their content, which it will promote through a new feature called News Showcase. However, as Fortune's David Meyer explains, this won't be the end of Google's war with the publishers, as many remain skeptical of its intentions and are still planning to collect licensing fees from the tech giant in the EU and Australia. Fortune
BitMEX charges
BitMEX, one of the world's largest cryptocurrency exchanges, has been hit with federal civil and criminal charges in the U.S. The news knocked the value of Bitcoin by over 3%. The Commodity Futures Trading Commission alleges that BitMEX runs an unregistered trading platform and failed to implement anti-money laundering controls. Fortune
Tesla Germany
The premier of Brandenburg, the German state where Tesla is building its first European factory, says he expects the carmaker to get the green light for the project. Construction is already well underway despite the fact that Tesla has not yet won planning permission, and public hearings are still being held about environmental and other issues. "My assumption is that a legally sound permission is possible here," said Dietmar Woidke. Bloomberg
Playboy Enterprises
Playboy Enterprises will go public again, nine years after the late Hugh Hefner took it private. Hefner's empire is now merging with Mountain Crest, a special purpose acquisition corporation, which will list on the Nasdaq under the "PLBY" ticker. Playboy isn't what it used to be: it stopped printing its magazine earlier this year (though some franchised editions around the world continue to print) and now pitches itself as a clothing, gaming and sexual wellness firm. BBC
This edition of CEO Daily was edited by David Meyer.


fortune--2020-10-02--In a time of crisis, Americans send a clear message to Corporate America: Focus on workers

This year has tested the relationship between corporations and society like no other. A once-in-a-lifetime pandemic, an economic shutdown and reopening, a national reckoning with racial inequality, and an election so acrimonious it feels the very principles of democracy itself are under threat. Faced with such tumult, how should business leaders respond?
Our 2020 survey report, which captures the opinions of over 17,000 Americans on a nationally representative scale, and which was released this week in conjunction with our partners the Harris Poll, provides corporate America with clear answers: Promote an economy that serves all Americans; create value for all your stakeholders, not just your shareholders; and most of all, look after your workers.
The results also paint a detailed picture of which issues the public believes are most important, how expectations of companies in this moment have changed, and how companies should respond on everything from racial equity to supporting employees’ right to vote.
Encouragingly, we find that 80% of Americans believe that companies can be a force for positive societal change, while 70% of respondents want CEOs of large companies to take a stand on important social issues (an almost 10% increase from last year). Another positive sign: More Americans than ever (37%) believe companies are prioritizing workers this year (up 17 percentage points from last year). A separate Harris Poll also found that 72% of Americans trust companies more than the federal government to address the COVID-19 pandemic and racial equality movement.
Americans also increasingly believe that their actions can shape the future course of business. The percentage of those surveyed who believe people can be effective when they act together to try to change companies’ behavior has now reached an overwhelming 87%, a 16-percentage-point increase over the past four years.
Yet even in such times of change, the most important priority has remained the same: Pay a fair and livable wage. Fair compensation has always been at or close to the top of the list of stakeholder priorities since we began polling in 2015, and we saw that emphatically underscored this year, with nearly 70% of respondents saying the issue is more important this year than last.
We also saw increasing importance attached to upholding human-rights standards (which Americans see as going hand in hand with worker rights); investing in workforce training; acting ethically at the leadership level; and cultivating a diverse and inclusive workplace.
Revealingly, even with all the recent focus on racial equity matters, we find that 89% of Black Americans, and 84% of Americans overall, believe that ensuring a living wage for all workers was the single most important action a company could take for achieving racial equity within their organizations.
Protecting worker health not surprisingly jumped in priority too, from being the 20th most important issue in 2019 to sixth this year. Eighty-three percent of Americans said that this issue is more important this year than last, the highest percentage increase across all issues. JUST Capital’s COVID-19 Tracker has captured all the major actions taken by companies since the pandemic began.
The results also highlight some important gaps between aspiration and reality—what people want companies to do, and what they think they’re actually doing. For example, 92% of Americans want large corporations “to promote an economy that serves all Americans,” yet only 50% believe large corporations are delivering on that goal. And even though 80% agree that large, public companies have a responsibility to consider their impact on all their stakeholders, they still believe a companies’ lowest-paid workers are being left behind. Americans are twice as likely to believe that companies are having a positive impact on their shareholders (70%) than on the financial well-being of their lowest-paid workers (35%).
Herein lies the opportunity. For what is clear throughout this research is that it is substance that counts the most, not grandiose plans or powerful rhetoric. When we founded JUST Capital, we set out to give the American people a clear voice on what businesses should prioritize. Over the past six years we’ve surveyed well over 110,000 people, including 17,000 this year alone. The results have always provided a robust and practical blueprint for corporate stakeholder leadership, and this year is no different.
People want companies to take concrete actions on foundational operating and strategic issues in order to build a more just economy, even—or perhaps especially—in a time of crisis. This is not about playing politics or prioritizing social activism over making money. It’s about building stronger, better businesses that give ordinary hardworking people the opportunities they deserve, that sustain our sense of community, that restore faith and trust in markets, and that ultimately provide a path to upward economic mobility that, right now, feels out of reach for so many.
Martin Whittaker is the CEO of JUST Capital, a nonprofit research organization that helps stakeholders assess the behavior of companies.