fortune--2020-05-26--The post-pandemic customer experience will be cashless

France ’ s Sanofi to sell stake in high-flying Regeneron to fund new drugs discoveries

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When McKinsey’s global managing director Kevin Sneader talks to colleagues and clients about getting back to business after the pandemic he outlines five “horizons”:
Resolve – making sure your workforce, customers and business partners are OK
– making sure your workforce, customers and business partners are OK Resilience – coping with cash management and other immediate challenges
– coping with cash management and other immediate challenges Return – creating a detailed plan to return to business
– creating a detailed plan to return to business Reimagination – adapting your long-term business model to the post-coronavirus new normal
– adapting your long-term business model to the post-coronavirus new normal Reform – figuring out how our collective experience with the virus will change the regulatory environment
In the U.S., where gyms, bars, hair salons, shopping malls, beaches, and parks are reopening (albeit with some restrictions and trepidation), most businesses are still negotiating the “Return” stage. Here in Asia, where I’m based, businesses in most of the major economies have fast-forwarded into “Reimagination.”
I’ve noted often in this space that there are all kinds of ways designers can add value to businesses in both horizons (see here and here). But, clearly, “Reimagining” is the phase in which designers will find their biggest “wicked problems.”
Sneader highlights one of the biggest of all in a recent webinar: the decline of cash. “Are we going to want to go back to paying for everything with cash when we’ve just had this contactless payment boost right around the world?” he asks. “I don’t think so. Probably physical cash has seen its best days.”
Some of that boost comes from the widespread fear that physical currency passed from person to person could be a vector for the coronavirus. The World Health Organization has stressed the importance of hand-washing after handling cash. Some central banks have been using heat or ultraviolet light to sterilize money.
In February, the People’s Bank of China began to take banknotes out of circulation in Wuhan, sterilizing some and destroying others. The U.S. Federal Reserve has been holding U.S. dollars returning from Europe and Asia in quarantine.
But it’s not just the public perception that money is dirty; it’s also the growing recognition among policymakers that, compared to digital payment solutions, physical currency is expensive to produce, distribute, count, and store, and hard for governments to track.
Moreover, the economic crisis has made it clearer than ever that a centralized digital currency would enable governments to provide stimulus payments far faster and more accurately to struggling businesses and consumers than the current system of putting checks in the post.
Euromoney last week published a detailed report on how the pandemic has accelerated discussion within the European Union about creating an integrated central bank digital currency. In the U.S. a coalition of finance experts, tech titans (including Facebook CEO Mark Zuckerberg), and cryptocurrency developers have advocated the creation of some kind of digital dollar.
But, as CoinDesk’s Mike Casey recently pointed out in Fortune, “China is winning the digital currency battle by a long shot.”
China hasn’t announced an official timetable for launching its digital currency, but the South China Morning Post reports that trials are set to begin this month in the four cities of Shenzhen, Suzhou, Chengdu and the Xiongnan zone near Beijing. The SCMP quotes Xu Yuan, a senior researcher with Peking University’s Digital Finance Research Centre as saying: “Looking back years later, the two defining historic events of 2020 would be the coronavirus pandemic and the other would be China’s digital currency.”
Former U.S. Treasury Secretary Henry Paulson, writing in Foreign Affairs last week, dismissed fears Chinese fintech dominance will jeopardize the dollar’s status as the global currency. But he acknowledges that the uptake in digital payment services in China has been “phenomenal.”
The demise of cash will have enormous implications for businesses the world over—and create equally outsized opportunities for designers who understand finance, technology, and customer experience.
More design news below!
Clay Chandler
-clay.chandler@fortune.com
NEWS BY DESIGN
Design directory
The Design Vanguard has launched a COVID-19 Design Directory documenting the design community's response to the pandemic. Already brimming with documents, the directory is open to submission from the public.
Room service
U.K. architecture firm The Manser Practice presents its vision for how hotels will function once lockdowns lift. CEO Jonathan Manser believes the Airbnb model will be shunned as guests seek the assurance of “properly maintained, clean space.”
New possible
McKinsey launched a new series of reports last week based on 150 hours of research conducted by a collective of designers interviewing over 100 individuals across eight countries. The goal is to illuminate how society has and will change as it emerges from the COVID chrysalis.
New purpose
The team at Fjord have shared their insights on how businesses can get back to work post-pandemic, too—or, as Fjord has it, in the era of “never normal.”
New kit
Stanford University’s d.school launched an online starter kit to help educators introduce design thinking to students, colleagues, or anyone else. The kit is designed to be used through Zoom and is free.
Remember the pandemic
Museums are curating artifacts to memorialize the experience of the pandemic. Not just artworks, but testimonies and mementos, too. A 6-year-old’s diary entry was the first COVID curio entered to the Autrey Museum of the American West.
Do not reply
Twitter is trialing a new feature that allows users to choose who can reply to their tweets. Critics say the silencing feature could allow misinformation to go unchecked; proponents might question what good a Twitter war is, anyway. One practical use of the feature, however: Twitter-based interviews, that read as a long thread of back-and-forth replies.
EVENTS BY DESIGN
May, delayed: The Venice Biennial has postponed both its architecture and its art editions by a year. The Architecture Biennial, scheduled originally for this month, will now be in May 2020. The art biennial will be in April 2022, rather than 2021.
June: The month-long London Festival of Architecture is running a stripped back event online this year, with the core public program moved to (hopefully) later this year. The San Francisco Design Week, which starts June 16, has gone digital too. Also, London Fashion Week: Men’s would have walked June 12-14. Instead, it will sit online.
July: Christie’s is planning a semi-virtual auction for July 10. The “first of its kind” event will livestream auctions from four cities—Hong Kong, New York, Paris and London.
Ongoing: Virtual Design Festival, a collaborative effort from Dezeen, Dutch Design Week and Design Indaba continues to exhibit work from a global roster of designers.
QUOTED BY DESIGN
"We are living in the fourth industrial revolution [but] what’s so different about this fourth industrial revolution is it’s a revolution of both people and technology."
Says John Maeda in his latest CX Report (CX being both customer and computational experience.) Maeda posits that the pandemic has driven us further into the ether of the fourth industrial revolution, which is cloud-based. To survive in the future job market, employees will need to become fluent in the language of technology. Employers, however, will have to recognize that employees can't evolve as quickly as tech.


fortune--2020-05-26--France’s Sanofi to sell stake in high-flying Regeneron to fund new drugs discoveries

The post-pandemic customer experience will be cashless

Sanofi is selling a stake in Regeneron Pharmaceuticals Inc. valued at about $13 billion, giving the French drugmaker more firepower to invest in booming fields such as cancer.
Regeneron has agreed to repurchase $5 billion of its stock from Paris-based Sanofi, the companies said on Monday. Regeneron said that Sanofi also plans to sell approximately 12.8 million shares, a holding worth more than $7 billion based on Friday’s closing price. That will mark the largest public equity offering in the heath-care industry on record.
The announcement is part of Chief Executive Officer Paul Hudson’s revamped strategy. The drugmaker said in December that it would end its hunt for new diabetes and heart disease medicines, helping save more than $2 billion, and focus on lucrative areas such as oncology. The transaction will boost Sanofi’s war chest for acquisitions to $50 billion, according to Bloomberg Intelligence’s Sam Fazeli.
“We believe the proceeds from this transaction will help further our ability to execute on our strategy to drive innovation and growth,” Hudson said in a statement.
Sanofi’s decision to sell comes after Regeneron’s stock surged 57% in the past six months. The French drugmaker holds about 23.2 million Regeneron shares, or 20.6% of the U.S. pharmaceutical company. When Sanofi first purchased shares of the Tarrytown, New York-based company in 2003, the stock traded below $20, compared with a closing price of $569.91 last Friday.
Sanofi rose as much as 2.2% to 89.57 euros in early Paris trading on Tuesday. Besides cancer, targets for deals may include immunology and gene-therapy technology, according to analysts at Bank of America Corp.
Bank of America and Goldman Sachs Group Inc. are the underwriters of the stake sale. Regeneron said it will fund the share repurchase with $3.5 billion of cash and $1.5 billion of financing from Goldman Sachs Bank USA.
Sanofi and Regeneron said there will be no change to their ongoing partnerships. Through their longstanding collaboration since 2003, the companies have brought five medicines to market, and have additional drug candidates currently in clinical development. Sanofi will continue to own about 400,000 Regeneron shares.
‘Increased Flexibility’
In December, Sanofi and Regeneron announced their intent to restructure collaborations for two drugs, the cholesterol-buster Praluent and the arthritis medicine Kevzara.
Hudson also said at the time that Sanofi could raise funds by selling its stake in Regeneron after a lock-up period expires at the end of 2020. “As the lockup expires, your flexibility increases,” he said. “We will look at the equity and decide where it can yield the best return for us as an organization.”
Regeneron announced later that month that it planned to cut staff as it restructured its partnership with the French drugmaker.
The deal will also likely reignite speculation that Sanofi may buy back L’Oreal SA’s 9.4% stake in the drug company. That, in turn, raises the possibility that L’Oreal would buy back a 23% stake that Nestle SA holds in the French cosmetics maker.
Covid-19 Collaboration
Both Sanofi and Regeneron have positioned themselves as front-runners in the race to develop therapies and vaccines to battle the coronavirus pandemic. Sanofi has received funding from the U.S. government to expedite research and development and scale up production capabilities for its high-profile vaccine candidates.
Sanofi is also working with Regeneron to evaluate how Kevzara could help very sick Covid-19 patients in respiratory distress. Initial trial results have suggested that the drug may help only the most critically ill patients — the severest of the severe — while those with slightly less dire cases of the disease likely won’t see a benefit.
The companies are moving forward with a big trial focused on the most serious Covid-19 cases, with results expected in June.


fortune--2020-05-26--How to stage a basketball season in a pandemic

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
A new episode of our podcast Leadership Next is out this morning featuring Cathy Engelbert, commissioner of the WNBA, who talked with us about struggling to figure out how to stage a basketball season in the midst of a pandemic.
Before taking the WNBA job last summer, Engelbert was the first female CEO of Deloitte, working there for 33 years, and as CEO for five. She says the similarities between business and basketball are surprising.
“I ran a people-first agenda at Deloitte, now we are running a player-first agenda. I took a 12-city tour and I listened to all the stakeholders, the media, the fans, the owners, the GMs, the front office people. It was pretty funny the similarities to big business. What I figured out very quickly was sports is big business.”
Engelbert played basketball herself in high school and college (Lehigh), and credits her rise into leadership to an athletic upbringing.
“It was all about competitiveness. I am one of eight kids. Five brothers. Really competitive background. We fought for everything, from cereal to pop tarts to our parents’ time . . . My dad played big time college basketball. He was actually drafted by the Detroit Pistons in 1957. It was all that competitiveness growing up in a very male-dominated family, went to a male-dominated university, entered a male-dominated profession.”
You can listen to the full podcast here. More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Stocks up
It looks like a solid opening on Wall Street today, following gains around the world. The markets appear optimistic about economic reopening, even though escalating U.S.-China tensions remain a worry. Japan's lifting of its state of emergency yesterday saw the Nikkei 225 rise 2.6% today, while Australia's ASX 200 was up nearly 3%. Wall Street Journal
Stanley Ho
Stanley Ho, who turned Macau into a gambling hotspot, has died at the age of 98 in Hong Kong, where he also built a real estate empire. His SJM Holdings now controls 20 casinos on the 10-square-mile island of Macau, where he won a monopoly license in 1961—the license expired in 2001, allowing in competitors such as Sheldon Adelson's Las Vegas Sands and Wynn Resorts. Fortune
Aston Martin CEO
Andy Palmer has stepped down from the helm of embattled British carmaker Aston Martin, and three directors have also resigned. The moves follow the collapse in Aston Martin's share price (down 98% in less than two years)—and were followed by a 40% boost to that share price. Billionaire Lawrence Stroll, who became executive chair after rescuing the firm: "The board has determined that now is the time for new leadership to deliver our plans." BBC
U.K. government
A minister has resigned from the British government over its continued employment of Dominic Cummings, a key adviser to Prime Minister Boris Johnson and one of Brexit's architects. During lockdown, Cummings (who had COVID-19) drove his family 260 miles to his parents' estate, to organize childcare—however, in a press conference yesterday he refused to accept he did anything wrong. Today, Scotland Minister Douglas Ross said: "I have constituents who didn’t get to say goodbye to loved ones; families who didn’t visit sick relatives because they followed the guidance of the government. I cannot in good faith tell them they were all wrong and one senior advisor to the government was right." Guardian
AROUND THE WATER COOLER
Chinese surveillance
If only someone had predicted that China would use the pandemic to boost surveillance! The city of Hangzhou is thinking of extending a smartphone-based system, popularized during the coronavirus outbreak, to permanently track citizens' health by monitoring things like how much sleep they get, and how much booze they drink. CNBC
Hertz autopsy
Bloomberg's Chris Bryant has an interesting piece on what went wrong at Hertz, which has filed for bankruptcy protection due to the pandemic: "Hertz’s complicated financial plumbing contributed to it becoming one of the most high-profile companies to seek protection from creditors during the corona crisis . . . economic shutdowns stemming from efforts to curb the new coronavirus suddenly threw a lot of sand in Hertz’s gears: The resale value of its vehicles fleet fell sharply, requiring the company to inject more cash into the financing structure. With only about $1 billion of cash on its books, Hertz was ill-placed to fund that collateral call." Bloomberg
European taxes
The European Commission will reportedly call for new environmental taxes and corporate levies in order to finance a proposed 500 billion euro ($548 billion) pandemic recovery plan. Germany and France suggested the recovery fund, but left it to the Commission to figure out how half a trillion in debt should be repaid. Financial Times
COVID-19 task forces
Who should be in your company's COVID-19 task force? Fortune's Michal Lev-Ram spoke to IBM's John Kelly, who built and manages that company's task force, and got a series of tips: realize it's a full-time job, appoint people who know the company well, embrace diversity… and communicate, communicate, communicate. Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-05-26--Swiss banking giant UBS to launch venture capital fund targeting fintechs

UBS Group AG is setting aside hundreds of millions of dollars of its own money to invest in fintech companies, joining peers in financing startups that are upending traditional banking.
The Swiss wealth manager is planning a corporate venture capital fund to make investments between $10 million and $20 million in dozens of companies, according to a person familiar with the matter. UBS plans to hold the stakes for at least five years, the person said, asking for anonymity because details haven’t been finalized.
A UBS spokeswoman confirmed the bank is starting such a fund, while declining to comment on specifics.
The venture fund comes just months after UBS named ING Groep NV’s Ralph Hamers, an outspoken champion of digital banking, to succeed Sergio Ermotti as chief executive officer from October. While wealth management — UBS’s biggest business — is traditionally a high-touch operation, with clients valuing personal contact, the coronavirus pandemic has accelerated a shift toward digital services.
“UBS wants to further engage with and support fintech firms,” said Mike Dargan, UBS’s Global Head Group Technology. “The new venture investment portfolio is a next step to accelerate our innovation and digitization efforts.”
The new fund will look at three broad categories to invest in: client engagement, investing and financing platforms, and improving underlying operations of the bank. While it is already screening potential investments, the bank is still in the process of hiring a team dedicated to run the fund, the people said.
More digital tools are a key part of a revamp plan for UBS’s wealth unit unveiled earlier this year. The bank wants to use them to save time on administrative tasks and cut costs, as competition for rich clients and a flight to cheaper, passive investment products erode profitability.
Globally, U.S. banks have been at the forefront of spending on fintech, according to Bloomberg Intelligence. The firms are generally more profitable and can afford to plow large sums into such efforts. UBS’s Zurich rival Credit Suisse Group AG invests in fintech through its entrepreneur capital arm.
UBS is also looking to use technology to make inroads in the Chinese wealth market. The bank is in the process of acquiring a digital fund distribution license, which would provide a plain-vanilla fund offering to rich Chinese customers. Over time, UBS plans to use such a digital license to move into advisory and on-boarding of new wealth clients, according to Edmund Koh, UBS’s head for the Asia Pacific region.
A previous effort by UBS in this area flopped. A 2017 internal project in the U.K. called SmartWealth was shut down a year later.


fortune--2020-05-26--VPN demand in Hong Kong reveals a new fear: China weaponizing the Internet

Tear gas was still fresh in the air as Lee, a 33-year-old demonstrator, watched a line of protesters trade insults with riot police in downtown Hong Kong on Sunday during a lull in the city’s largest anti-government demonstration since 2019.
Dressed in all-black and wearing a surgical face mask, Lee, who shared only his surname to avoid being identified by authorities, said that he was there to oppose the new national security law that China’s government proposed for Hong Kong on Thursday. Beijing says the law is intended to prevent and punish acts in Hong Kong that threaten China’s national security. Critics believe it will be used to diminish freedoms guaranteed to Hong Kong when the U.K. handed the city over to China, such as the right to protest, a free media, and an independent judiciary system.
“I’m not afraid of China, and that’s why I came here today,” Lee said. But even as Lee felt emboldened to publicly protest Beijing’s growing influence in Hong Kong, his fears about the fallout manifested elsewhere. Hours after Beijing’s announcement, Lee downloaded a virtual private network (VPN), which conceals his Internet activity by routing his connection through servers around the world. As Beijing asserts more control over the self-governing region, Lee is increasingly worried about his digital privacy.
He’s not alone.
Shortly after Beijing announced the new law, NordVPN said inquiries for its services shot up by a factor of 120. Surfshark, another VPN service provider, said it sold a week’s worth of subscriptions in the hour following the news. Other providers like ProtonVPN and Atlas VPN have similarly reported surges in traffic and sign-ups from Hong Kong users.
The national security law does not specifically address online freedoms, and Chinese officials say the government is determined to uphold the “one country, two systems” precedent that provides Hong Kong with relative independence from Beijing. On Tuesday, Hong Kong chief executive Carrie Lam said at a press conference that people in Hong Kong have the freedom to say whatever they want “for the time being.”
Yet the concerns of protesters and other Hong Kong residents are not without merit. In mainland China, the Internet is one way Beijing restricts information and quashes dissent. Its “Great Firewall” blocks foreign websites like Facebook and the New York Times and censors domestic news and social media platforms. Foreign and domestic companies alike employ VPNs to bypass the restrictions and communicate more easily with counterparts overseas. The VPNs, however, are often slow, cumbersome, and subject to periodic clampdowns that can make business more difficult.
Hong Kong, meanwhile, still enjoys unrestricted access to the web, a trait that bolsters the city’s appeal for foreign firms and talent looking to do business in the region. But Beijing’s new national security law may open the door to Internet interference.
“Hong Kong people might need to face the reality that free speech and online speech is probably not protected as much as before,” said Jyh-An Lee, a professor focusing on Internet law at the Chinese University of Hong Kong Law School.
Private information
Lee, the protester, said he downloaded a VPN not because he thought the Chinese government would soon restrict the Internet, but rather because he’s “really afraid that the [Chinese Communist Party] will get my personal information.” Of the eight protesters Fortune spoke to on Sunday, seven had downloaded VPNs. The lone holdout said he planned to get one in the coming days.
Several of the protesters echoed Lee’s concerns that the new national security law would provide the Chinese government with legal means to make arrests over online content.
Lee, the law school professor, says that Beijing’s proposed language for the law banning seditious activities, foreign interference, and terrorist acts is indeed “deeply concerning” for the future of online speech in Hong Kong. Fang Ke Cheng, an expert in Chinese digital media and censorship at the Chinese University of Hong Kong’s School of Journalism, says Chinese authorities could use it to force Hong Kong’s Internet service providers to turn over user data. The Chinese government is unlikely to suppress Internet freedoms or online activists en masse, Fang says, but could instead target a few individuals.
A recent case involving former independent Hong Kong bookseller, Causeway Bay Books, is an example of how such government action could play out. In 2015, five employees of the store, known for selling politically sensitive titles, disappeared. The how and why of the case remain shrouded in mystery, yet many attribute the disappearances to orders from Beijing.
“There hasn’t been a widespread crackdown on bookshop owners, but that one case is enough to create an environment where everyone is afraid [for] their safety,” Fang said. Similarly, Beijing may punish a few prominent websites or Internet users to instill fear among the wider online public, Fang added.
In that sense, the law may have a “chilling effect,” discouraging online activism and prompting self-censorship, professor Lee said.
Online mobilization
At least some protesters are keen to continue their movement online, even if adjustments must be made.
“After the security law, we will have to find new ways to go on the Internet and discuss our protest methods,” said So, a protester in his mid-twenties who wanted to keep his full name private for fear of being targeted by authorities.
Mass rallies began in Hong Kong in June 2019 in opposition to a proposed extradition bill in the city’s legislature, which opponents said would enable the Chinese government to extradite Hong Kong political prisoners and try them on the mainland. In the following months, the cause grew into an enormous anti-government protest movement with help from online platforms.
A local Reddit-like online message board called LIHKG has provided a space for activists to post new articles, discuss tactics, and organize new protests. The encrypted messaging app Telegram was also popular among organizers.
If protesters have to find alternative means to communicate online, VPNs appear to be the first step.
“The awareness of Internet security is quite high in Hong Kong,” said a 27-year-old protester and VPN user who went by the name Chan. “We are prepared for the worst.”
Additional reporting by Eamon Barrett and Naomi Xu Elegant


fortune--2020-05-26--What do workers fear most about going back to the office? Each other

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As coronavirus lockdowns begin to ease, the biggest fear among white-collar workers in the U.S. about returning to the office is their coworkers’ behavior, according to a new survey shared exclusively with Fortune.
Controlling employees’ behavior—including when they’re not in the office at all—is a thorny challenge. Workers may also be concerned about one another’s willingness to keep physical distance in the office, or to stay home if they feel sick.
“If your colleague is behaving in way that’s silly, they’re going to underground parties at night, that’s scary,” says Jamie Hodari, CEO of Industrious, an office space operator, which conducted the survey in partnership with the polling and data company Elucd.
Approximately 37% of office-going adults said that, when thinking about returning to the office, they are most concerned that “others in my office will behave in a way that puts me in danger.” By contrast, just 19% of respondents cited lax measures by their employer as their biggest concern about returning. Eleven percent were most worried about productivity under new health restrictions, and 8% were most concerned about the safety of their commute.
But a little more than a fourth of survey respondents (26%)—the second-largest group of respondents—said they had no concerns at all about returning to the office.
The results cast new light on the discourse around returning to the workplace during the coronavirus pandemic. Much of that has understandably focused on elements that employers and building operators can control, such as enhanced cleaning protocols, building ventilation, and redesigning offices to keep distance between workers.
“Some of this depends on density,” says Hodari, “But a lot of it depends on the way people behave and comply with protocols or not.”
Despite that anxiety, the survey found most workers are amenable to getting back to the office. Sixty percent of respondents said they were likely or very likely to return to the office when they had the option to do so.
The survey did find deviations between office workers in different circumstances. Above all, those who commute using public transit are substantially more hesitant to return to work than those who do not. Only 34% of public transit commuters said they were “very likely” to return to work when offices reopen, compared with 48% of non-transit commuters.
Office workers with kids at home were slightly more likely to want to get back to the office than those without kids: 48% of parents said they were “very likely” to return when offices reopened, compared with 45% of those without kids.
Hodari says the results highlight the diverse situations faced by workers as well as the need for flexibility from employers. “I really hope that most American businesses approach this as a question of employee choice,” he says. “There are going to be employees who live two blocks from the office and have no concerns, and there will be employees who can barely get their work done if you force them to come into the office, because they’re going to be riddled with anxiety and fear.”
The survey is the inaugural edition of a new data-gathering project called Workstat. The collaboration between Industrious and Elucd will conduct weekly surveys with an evolving set of questions about workers’ attitudes toward their workplace.
The current survey covers responses from 745 U.S. adults who worked in offices prior to the coronavirus crisis, weighted by demographic factors including age and race.


fortune--2020-05-26--How the WNBA commissioner sees live sports continuing after the pandemic

On the latest episode of “Leadership Next,” Fortune’s podcast about how business leadership is evolving, WNBA commissioner Cathy Engelbert joins cohosts Alan Murray and Ellen McGirt to talk live sports and people-focused leadership in the age of the coronavirus.
Athletics as an industry have been temporarily halted as a result of the pandemic, but Engelbert and her team at the WNBA have been working overtime to engage the fans they already have and bring in new ones. In April, the league held its first-ever virtual draft from Engelbert’s home, broadcast on ESPN, and brought in the biggest audience the event had seen in 16 years.
“We need to look at the opportunities in this crisis,” she said. “And I think there is an opportunity to engage fans in a different way.”
She said the draft’s success and the continued pause in live sporting events has the WNBA thinking of ways to get fans involved remotely, even after sports are back in full force. This could include the gamification of the league’s games via app, which would arm the league with more data to further engage its audience.
Around the nine-minute mark, Murray asked Engelbert about her transition from being the CEO of Deloitte—the first woman to hold the role—to becoming the commissioner of the WNBA. Her answer: She was shocked at the myriad similarities.
“Sports is big business,” she said, comparing leading Deloitte to leading the league.
Murray then asked McGirt, who has many years on the inclusion beat under her belt, what the business world can do to bring more women into the leadership fold. In the recently released Fortune 500, only around 7% of the listed companies’ CEOs are women.
McGirt recommends listening to women and understanding their many different experiences, as well as carrying out equity audits to find the problem areas for women in corporations. She also suggests that a cultural shift needs to happen, in which business has to “rethink central casting.” That means reassessing what a member of the C-suite looks like, as well as what experience and expertise they have. It can’t be business as usual if change is going to come.


fortune--2020-05-26--Stocks soar on vaccine hopes, bailouts and new plans to re-open the global economy

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning, Bull Sheeters. There’s plenty of green on the screens to start off this holiday-shortened week as investors cheer bailouts, re-openings and vaccine trials.
Here’s where investors are putting their money.
Markets update
Asia
The Asian indices are trading higher. Even Hong Kong’s Hang Seng , up nearly 2% , is bouncing back strongly after Friday’s plunge.
Even Hong Kong’s , up nearly , is bouncing back strongly after Friday’s plunge. Hong Kong’s CEO Carrie Lam told reporters on Tuesday that the rule of law, independent judiciary and personal freedoms aren’t under threat by Beijing’s sweeping new security proposals , words that seemed to placate investors .
Carrie Lam told reporters on Tuesday that the rule of law, independent judiciary and personal freedoms aren’t under threat by Beijing’s sweeping , words that seemed to . On Monday, Japan rescinded its severe COVID-19 state of emergency measures. The much anticipated back-to-work decision comes ahead of schedule.
Europe
European bourses soared out of the gates on Tuesday. London’s FTSE 100 was up nearly 2% at the open. On Monday evening, British Prime Minister Boris Johnson said most shops and businesses in the U.K. will reopen by June 15 .
bourses soared out of the gates on Tuesday. London’s was up nearly at the open. On Monday evening, British Prime Minister Boris Johnson said and in the U.K. will reopen by . Lufthansa shares took off on Tuesday after the German airline moved closer to a €9 billion ($9.8 billion) bailout from Berlin. Airbus , up 2%, also climbed on the news.
shares took off on Tuesday after the German airline moved closer to a €9 billion ($9.8 billion) bailout from Berlin. , up 2%, also climbed on the news. Bayer shares were flying as well on Monday (they’re flat today) after the agrochemicals giant said it had reached a verbal agreement to settle a significant portion of the Roundup weedkiller lawsuits it faces.
shares were flying as well on Monday (they’re flat today) after the agrochemicals giant said it had reached a verbal agreement to settle a significant portion of the it faces. Paris-based Sanofi will sell a $13 billion stake in Regeneron Pharmaceuticals, part of CEO Paul Hudson’s strategy to pivot to fast-growing drug development sectors.
U.S.
The Dow , S&P 500 and Nasdaq futures are all solidly in the green, as I type.
, and futures are all solidly in the green, as I type. Nothing gets investors more giddy than headlines of a coronavirus vaccine breakthrough . They’re getting that today, courtesy of Novavax . The biotech firm announced it’s pushing ahead with trials of its NVX-CoV2373 in Australia.
. They’re getting that today, courtesy of . The biotech firm announced it’s pushing ahead with trials of its NVX-CoV2373 in Australia. There’s signs of life—faint, it must be said—in the battered U.S. hospitality sector. Spending on hotels, restaurants, airlines appears to be picking up, finally.
Elsewhere
Gold is down.
is down. The dollar is down.
is down. Crude is climbing. Brent, the global benchmark, is trading above $36 per barrel.
Welcome to the rally
A bit of a recap as we turn our attention again to the markets after this long weekend. Last week was a good week for the S&P 500. It was up 3.2%, the second positive week out of the past three.
The segments leading the way were not the typical ones. Energy and industrials, to name just two, have been the out-performers of late. That’s despite all the enthusiasm around biotech firms working on coronavirus vaccines and stay-at-home tech stocks.
Today’s chart breaks down the big winners and losers on the S&P last week.
Industrials and energy far outpaced the S&P 500 as a whole last week. These are what you’d call cyclical stocks. They tend to move in line with the performance of the economy. That makes sense. If the economy is booming, energy demand is too.
The economy though is not booming. So why then are investors so excited about cyclicals?
There could be two big reasons. First, bargain hunting. These stocks are dirt cheap. Investors may be betting they can’t possibly fall any further, so now is the time to pounce.
Another explanation is a bit more bullish. Investors may see any progress on the vaccine and re-openings news front as signs an economic recovery is on the horizon. And, remember, a big bounce-back in economic activity should lift cyclicals.
But this trade has some market watchers concerned. As JJ Kinahan, chief market strategist at TD Ameritrade, told the Wall Street Journal, “it makes sense that people are buying cyclicals on the [vaccine] optimism… But the part that makes me nervous is midmonth in June when most states [are open]…I don’t know if the reality will be able to keep up with the great expectations that we’re seeing right now.”
Great expectations seems to embody the mood in the markets—for today, at least. Curves are flattening, more major economies are reopening and more vaccine trials are advancing to the next stage.
It’s a risk-on day.
***
Postscript: Roman Holiday
Sunday was one of those spectacular late Spring days— cloudless skies, gentle breeze, temps in the low 80s—that, this time of year, the Ministry of Sunshine’s high-propaganda department regularly cooks up to distract us from the rest of the government’s failings.
And so, over morning coffee, we decided, let’s play tourist. My wife and I decided to take the girls into Rome’s centro storico for a gita (excursion) to mark the occasion of the first weekend in Italy in which bars, restaurants and museums were permitted to reopen after a 10-week lockdown.
The last time we’d set foot in the city center—a trip that, without traffic, takes under 10 minutes from our front door—was February; we were anxious to revisit some favorite haunts.
What we found was something we won’t soon forget. The city resembled an alien planet. No Russians, No Yanks. No Brits. No Chinese. No Milanese tourists. Just locals.
It hit me when we got to Piazza Navona. I’ve seen Gianlorenzo Bernini’s fountains there countless times, but never in such an intimate setting. For a good minute or two, it was just me and the river gods; no pesky street vendors getting in my face.
The Bernini masterpiece, the Fountain of the Four Rivers, has been attracting a crowd in Piazza Navona since the mid-17th Century. It was a quiet affair this past weekend. Original Photo: Bernhard Warner
Around every corner, the restaurants were largely vacant. Many shops hadn’t bothered to open. I wonder if some even will.
My wife observed that the city looked like a version of Rome from a different era, one frozen in time from, say, the 1950s—no tourists; just scattered groups of masked pedestrians and families on bicycles. I don’t think I even spied a single motorino. Roman Holiday it was not.
After a quick lunch (we were the only diners), we made our way to Sant Eustachio il caffé, long a favorite with food critics, including this amateur one. There was a table! Outside! We grabbed it, and ordered an espresso macchiato for me and two icy caffé granita for everyone else. After the waiter left, I got distracted by the corkscrew spire on Francesco Borromini’s crowning engineering feat, the church of Sant’Ivo alla Sapienza, which looms over the square. What was Borromini thinking!?
Before we could geek out on 17th century Roman baroque architecture, the waiter plopped down a tray of coffees and an €18 euro tab. (That’s why you never grab a table out front.)
Coffee from Sant Eustachio il caffé is a Roman tradition. Original photo: Bernhard Warner.
The next planned stop was Piazza di Spagna; but first a pit stop for gelato and new sandals for the kids. We took the scenic route past the Pantheon (no queue) to the famed gelateria, San Crispino. Another shocker. Closed. I did some window-shopping at Davide Cenci, the near-100-year-old clothing shop, while the kids bought a Plan B gelato from Grom, now part of the Unilever empire.
By the time we got to the Spanish Steps, I’d lost count of the number of luxury retail boutiques that remained either closed or partially opened along the fashionable via Condotti—Gucci, Prada, Louis Vuitton, Tod’s, Fendi. I guess if the oligarchs aren’t coming to town, there’s no bother opening up.
The famed via Condotti, known for it luxury retail shops, was largely vacant on Sunday. Usually, it’s heaving with shoppers and onlookers. Original Photo: Bernhard Warner.
If via Condotti is any indication, luxury is not having a good pandemic here in the heart of southern Europe. Nor is tourism, which makes up 13% of Italian GDP.
But pedestrians and cyclists are in heaven.
Have a nice day everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
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Today's reads
BBQ stocks. Social distancing and grilling don't always mix, we're finding... Bank of America is trying to quantify the hidden impact that could have on your portfolio. "The group’s research on Memorial Day found that only 40% of respondents" planned to grill over the Memorial Day weekend, down from 56% in a typical year, my Fortune colleague, Lee Clifford, reports. Should that trend continue through July 4th and Labor Day, it could really affect these food and beverages stocks.
High fliers. U.S. Airline stocks had the month to forget, and it's hard to imagine things getting much better any time soon. Fortune's Shawn Tully examines their prospects for a turnaround, given that people are afraid to fly and the carriers are trying to manage enormous debt loads. But the Big Four U.S. airlines do have one secret weapon—and it could be a game changer.
(Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
Market candy
Prom night
You either loved your high school prom, or you hated it. I was firmly in the latter category. But kudos to this Wall Street Journal piece on "pandemic proms." The "class of COVID-19" has found some creative ways to celebrate an American tradition. Even prom curmudgeons like me found it touching.


fortune--2020-05-26--Stanley Ho, who built Macau casino empire, dies at 98

Stanley Ho, a onetime kerosene trader who built a casino empire in Macau that propelled the Chinese island past Las Vegas as the world’s biggest gambling hub, has died at age 98, local media reported.
Known as the King of Gambling, Ho dominated gaming in the former Portuguese colony after winning a monopoly license in 1961. His SJM Holdings Ltd. flourished as China’s economic opening created a flood of new wealth in a country with a passion for gambling. SJM now controls 20 casinos on an island of about 10 square miles.
Ho’s rise transformed Macau from a commercial backwater into the “Las Vegas of Asia” by exploiting its big advantage over the rest of China — casinos were legal. As his fortune swelled, he expanded beyond the island, building residential and office buildings in Hong Kong. In 1984, he won a license to operate a casino in Portugal and spent $30 million to open the Casino Pyongyang in North Korea in 2000.
Ho’s Macau monopoly expired in 2001, two years after China regained control of the island from Portugal. China then granted licenses to competitors, including Sheldon Adelson’s Las Vegas Sands and Wynn Resorts Ltd. Rather than hurting Ho, the increased competition coupled with China’s booming economy accelerated Macau’s growth into the world’s biggest gaming hub and Ho’s fortunes ballooned.
The city’s gaming revenue has become a barometer of the economy of China, where two thirds of its gamblers are from. While casino takings have usually grown with China’s GDP, it plummeted in 2014 when China launched an anti-corruption campaign and again in 2020, after the coronavirus pandemic triggered a 97% drop in revenue as Chinese gamblers were prevented from travel into the enclave.
Ho fathered 17 children with four women and when he retired around mid-2018, he passed some of the top roles at SJM to his heirs. Daisy Ho, his daughter, became chairman and executive director. Angela Leong, SJM’s second-largest shareholder whom Ho referred to as his fourth wife, became co-chair with another executive director.
Still, the succession reopened long-simmering family rivalries. In January 2019, Pansy, his eldest daughter with his second wife, joined forces with some siblings in an alliance that holds sway over a controlling stake in SJM, giving her the upper hand over Leong in the fight for the jewel in the crown of Ho’s $14.9 billion empire. Pansy, one of Hong Kong’s richest people, is also executive chairman of Shun Tak Holdings Ltd., which runs most of the ferries between Hong Kong and Macau.
Ho was born Nov. 25, 1921, into a wealthy Hong Kong family of Chinese and European descent and attended university in the city. His family’s circumstances deteriorated during World War II, when the Japanese invaded the British colony. At age 21, he fled to neutral Macau where he got his start trading everything from kerosene to airplanes, at a time when the island was best known for fishing and producing fireworks and incense.
Ho was an avid ballroom dancer and a former Hong Kong tennis champion. He won the Chinese Recreation Club doubles competition for older players for several years running into his 80s. Ho also carried the Olympic torch in 2008.


fortune--2020-05-26--Novavax expects results from new human trial of coronavirus vaccine in July

Novavax Inc. initiated testing of its coronavirus vaccine candidate in people and anticipates providing a first look in July at what sort of immune responses are generated.
In the first part of the study, 130 healthy adult volunteers at two sites in Australia will get two doses of NVX-CoV2373, the biotech’s experimental vaccine. If the initial results look promising, the company plans to quickly move into the second phase of the trial, which would expand testing to other countries and age groups outside of 18 to 59.
Novavax’s valuation has swelled by more than 1,000% to about $2.7 billion since the start of the year despite having no products on the market. With about $388 million in funding from the Oslo-based Coalition for Epidemic Preparedness Innovations in its pocket, Novavax has said it is targeting emergency-use authorization and production could be scaled up to 100 million doses by year end.
“Our investment in Novavax allows us to focus on manufacturing in parallel with the clinical development of the vaccine, so that if the vaccine is proven to be safe and effective, we can make doses available to those who need them without delay,” CEPI chief executive Richard Hatchett, said in a statement.
The Gaithersburg, Maryland-based company is one of an estimated 10 that have begun testing vaccines for the pandemic in people, according to the World Health Organization. WHO estimates there are more than 100 other vaccine candidates in earlier stages of development. Moderna Inc. reported the first Covid-19 vaccine results in humans last week.
Smaller vaccine developers are racing alongside larger, profitable drugmakers like Pfizer Inc., AstraZeneca Plc. as well as academic institutions. Even if a vaccine is eventually shown to be effective, there will be hurdles to manufacturing as well as distribution.


fortune--2020-05-27--How Greece can reopen without ruining its coronavirus containment success

The global liquor industry might not fully recover for another five years

In early February, if someone predicted that Greece’s response to the coronavirus pandemic would be stronger than that of Germany, France, the U.K., and Italy, they might have been accused of spending too much time with Dionysus, the Greek god of wine. Low expectations seem justified given Greece’s failures during the last decade’s financial crisis.
But facts are facts. As measured by deaths as a proportion of the population, Greece has proved six times as effective as Germany, 27 times as effective as France, and 35 times as effective as the U.K. So far it has lost just 172 people to the pandemic, out of a population of 11 million.
Prime Minister Kyriakos Mitsotakis faced labors that would have scared Hercules. A decade of austerity decimated Greece’s public health system. Greece has the second-highest population of people over 65 in the EU after Italy. About a third of all Greeks live in or near Athens, which is densely urban, famously social, and highly reliant on public transport. Greeks also have a track record of poor governance, public disobedience, and populist protests.
And yet, Mitsotakis—a former banker and management consultant, with degrees from Harvard and Stanford—led a very different response.
First, the government acted swiftly. Seeing transmissions elsewhere, Greece took restrictive measures early on—two weeks before its first death. The U.K. announced its full lockdown a day after Greece did, but at that point the Western European nation had 11 times as many confirmed cases and 24 times as many deaths.
The fast response was also well executed. Public health officials communicated directly with the public through daily televised briefings. Surprisingly, the vast majority of Greeks complied with public health orders. The government nearly doubled ICU capacity and recruited over 3,500 medical professionals. It coordinated action with philanthropies—such as the Stavros Niarchos Foundation and the Onassis Foundation—and corporate partners to ensure donations were spent effectively and efficiently. It worked with local 3D-printing vendors to produce health care equipment. Mitsotakis even took on the powerful Greek Orthodox Church, banning in-person Easter services in spite of protests from church leaders.
This was a dramatic turn. Greek political leaders across the spectrum had created an art form out of publicly blaming experts for difficult policy measures—from Brussels bureaucrats to local finance and tax officials. In stark contrast, Mitsotakis elevated experts.
Greece was also lucky. The country is smaller, more centrally managed, and less globally connected than its bigger European siblings. At the same time, it had to manage a complicated geography, a history of public noncompliance with laws and regulations such as tax collection, and an ongoing refugee crisis.
Overall, Greece demonstrated consistency in focus and resolve; that same strategy should guide its reopening efforts.
On May 4, Mitsotakis announced his reopening plans. The first phase includes reopening some businesses, schools, public beaches, and religious places under strict hygiene rules. The use of masks has become obligatory in public transportation and all services that require physical contact. Remote working and learning is highly encouraged.
The overall recovery looks less like flicking an on-off switch than gradually pushing up a dimmer. Moving too quickly could not only pose health risks, but also undermine Greece’s new sense of achievement.
Tourism is key—Greece’s one bright spot during the financial crisis. In 2019, it welcomed 34 million visitors (three times the country’s population), who directly contributed 18 billion euros in revenue (around 10% of GDP) and supported 850,000 jobs (about 22% of employment). But Greece’s overdependence on tourism could become its Achilles’ heel. Even in the best-case scenario, Greece’s tourism minister expects a 50% reduction this year.
The government announced last week it will start welcoming tourists on June 15, initially opening to countries that have had relative success in containing the virus. But tourists will only travel to Greece if they feel it’s safe. Safety must include social distancing, effective and immediate treatment of those who become sick, and contact tracing.
Vacationers will need to curtail the flamboyant social mixing that has made Greece an increasingly popular destination, particularly for younger visitors. Normally bustling streets, ports, and island towns will need to mitigate crowd sizes. Compulsory masks would inspire confidence with visitors and protect local workers.
When people are diagnosed with the coronavirus, the response must be fast. Remote locations need to have clear plans for how to treat patients with varying degrees of illness. These should include on-call doctors for all hotels, telemedicine, and access to structures designed to exclusively treat COVID-19 cases.
Greece may want to experiment with electronic bracelets and cell phone–tracing applications. Such initiatives may be expensive and complicated, but they are achievable if established early on at points of entry.
Greece has a golden opportunity to reimagine travel and set global standards for the coronavirus recovery. After showing the world how to successfully lock down, Greece can do the same with showing us how to reopen.
William J. Antholis is director and CEO of the University of Virginia’s Miller Center. He is also a nonresident fellow in the Governance Studies Program at the Brookings Institution.
Filippos Letsas is senior research assistant in the Foreign Policy Program at the Brookings Institution.


fortune--2020-05-26--Will Twitter ever remove one of Trump’s inflammatory tweets?

A tale of two Coopers , one as old as the nation

For the first time, Twitter has added a fact-check label to a tweet by President Donald Trump that claimed mail-in election ballots would be fraudulent. But it stopped short of removing those tweets or others he posted earlier this month about a false murder accusation that generated huge criticism against the company for failing to remove them.
Those tweets, which, for average users, risk being deleted for violating Twitter’s policies against harassment raise the question: Will the company ever remove one of the President’s inflammatory tweets?
“Trump is pushing the limits of what Twitter is going to allow,” said Steven Livingston, director of the Institute for Data, Democracy, and Politics at George Washington University. “At some point, it’s going to have to make the decision that this exceeds what is allowed.”
The controversy is over an unfounded claim by Trump that MSNBC news host and former Republican Rep. Joe Scarborough may have murdered his staffer Lori Klausutis in 2001. Klausutis, who was 28, died after fainting and hitting her head on a desk in Scarborough’s Florida office while he was in Washington, D.C. Her widower, T.J. Klausutis, last week wrote a letter to Twitter CEO Jack Dorsey, asking him to remove the tweets, the most recent of which was posted on May 12.
When will they open a Cold Case on the Psycho Joe Scarborough matter in Florida. Did he get away with murder? Some people think so. Why did he leave Congress so quietly and quickly? Isn’t it obvious? What’s happening now? A total nut job! — Donald J. Trump (@realDonaldTrump) May 12, 2020
But Twitter has no plans to remove the tweet. A spokesman explained the decision by saying: “We are deeply sorry about the pain these statements, and the attention they are drawing, are causing the family. We’ve been working to expand existing product features and policies so we can more effectively address things like this going forward, and we hope to have those changes in place shortly.”
The debate comes as Twitter continues to struggle with how to police misinformation and offensive comments, especially when they come from public figures. Twitter won’t remove those tweets, claiming that the public deserves to see what their leaders say, regardless of the content.
But it has removed a few tweets that promoted misinformation about the coronavirus. In March, Twitter removed tweets from the Presidents of Brazil and Venezuela as well as former New York City Mayor Rudy Giuliani, all of whom had endorsed hydroxychloroquine as an effective treatment for the coronavirus.
Last year, Twitter debuted a new label for public figures that warns viewers about a problematic tweet before allowing them to see its contents. But Twitter has yet to use the label.
On Tuesday, however, Twitter added a fact-check link to the bottom of a tweet by Trump. The link, which says “get the facts about mail-in ballots,” is an effort to debunk his claim that “There is NO WAY (ZERO!) that Mail-In Ballots will be anything less than substantially fraudulent.”
There is NO WAY (ZERO!) that Mail-In Ballots will be anything less than substantially fraudulent. Mail boxes will be robbed, ballots will be forged & even illegally printed out & fraudulently signed. The Governor of California is sending Ballots to millions of people, anyone….. — Donald J. Trump (@realDonaldTrump) May 26, 2020
The problem is complicated, said some political experts. Twitter wants to protect free speech but must also enforce its policies against hate speech, harassment, and abuse. Meanwhile, the service doesn’t want to be an arbiter of truth or censor comments that could serve the public interest.
“It’s a fool’s errand,” said Nadine Strossen, former head of the American Civil Liberties Union. “It’s doomed to fail, and it’s never going to satisfy everybody.”
Strossen added that as infuriating as Trump’s tweets may be, it’s important that society refrain from totally relying on Twitter to choose which comments should be censored. Free speech “can do a tremendous amount of harm…but even more harmful is the adverse impact of the censorship from a private entity,” Strossen said.
Joshua Tucker, codirector of the Center for Social Media and Politics at New York University, said Twitter also must walk a fine line in the actions it takes against politicians. For example, banning a politician for repeatedly violating its rules would only infuriate one side of the political spectrum or another. “It’s really hard to imagine how kicking a major political leader off Twitter would be interpreted as anything other than a partisan action,” he said. “There’s a societal interest in whether you want a private company regulating speech, and then there’s the private interest of the companies themselves.”
Livingston said fear of criticism by conservatives is probably why Twitter has declined, until now, to police Trump’s tweets. The company also has a dilemma on its hands, in that partisan groups can use its service to mobilize, further fueling the cesspool of anger, hate, and misinformation. “The very condition they helped create, they can’t solve,” he said.
Livingston expects Twitter to eventually “step up and meet its obligations. Twitter somewhere is going to recognize this isn’t right,” he said. “When any politician starts accusing someone, without evidence, of murder, that’s just taking it too far.”


fortune--2020-05-26--A clampdown on corporate tax avoidance is coming. Companies should embrace it

The importance of effective government in moments of crisis is being writ large. First, to save lives through state health care and measures to stop the spread of COVID-19. Second, to establish social safety nets for the most affected while intervening to keep companies and supply chains afloat. Globally we’ve seen an estimated $15 trillion in emergency stimulus, with more to come. Little wonder that around the world trust in governments has surged.
As we eventually reopen and, hopefully, redesign our economies, significant spending will remain vital as governments invest to boost growth. The total costs will be massive. In the U.K., for instance, the forecasts already predict the national deficit could rise from 55 billion pounds to 337 billion pounds (around $67 billion to $410 billion) by the end of this year. Even the wealthiest nations will need to find serious cash—which means healthy tax bases.
Against sharply rising joblessness, increases to income tax and further burdens on employment may be ill-advised. Indeed, the opposite strategy could be needed—increasing taxes on capital, wealth, and unsustainable resource use, and away from labor. And what is certain is that more big corporations should start paying their fair share. Any business wanting to speed the recovery and create resilient, lasting prosperity should contribute to the fiscal revenues needed to deliver it.
Yet we live in a world where corporate tax is widely accepted as a cost to minimize. Benjamin Franklin once famously wrote there is nothing as certain in life as “death and taxes.” Plenty of CEOs and CFOs would disagree with the second part of his statement.
Of course, every company leader has a right to expect their profits to be spent wisely and to plan against inconsistent double taxation. But still, too many interpret the spirit of the law as an obligation to pay the minimum, often directing saved income to shareholders rather than new investment.
The year after President Donald Trump lowered the U.S. corporate tax rate from 35% to 21%, the majority of Fortune 500 firms paid only 11% and dozens paid zero, according to analysis from the Institute on Taxation and Economic Policy. Bermuda is apparently one of the most productive countries in the world. In 2017, U.S. corporations booked $32 billion of profits there, from just 547 employees, as noted by U.S. Congress representatives in a letter to the Organization for Economic Cooperation and Development (OECD).
And even now, as ordinary taxpayers rescue companies at extraordinary expense, tackling corporate tax avoidance is virtually absent from the recovery debate—including from statements recently released by the Business Roundtable and World Economic Forum, two leading global business platforms.
Often, the blame is placed on the authorities who set the rules, which companies merely follow. But if this defense sounded weak before the coronavirus pandemic, it is indefensible now.
Yes, governments set the rules, but only business leaders can provide politicians with the confidence that they’ll embrace tax regimes which are reasonable and fair. And don’t business leaders have a moral obligation to approach taxes responsibly? Aren’t we only able to run successful companies because the state provides crucial services paid for by taxes—education, roads and railways, policing, and the rule of law—and because of the social stability guaranteed by some measure of redistribution?
Whether you agree or not, the likelihood is that some sort of clampdown is coming. Governments across developed economies will need to fund spending and reduce debt, and civil society will demand the cost is spread. A 2017 survey of U.K. adults found that nearly nine out of 10 people already thought tax avoidance was wrong, even if it is legal. How many want to bail out cruise ships moored in tax havens now?
Even before the virus, some countries were strengthening their stance. The Germans support a minimum corporate tax rate on multinationals’ profits, which they will bring to the EU when they assume the presidency this July. France has pressed ahead with a new tax on tech giants until international agreement can be found through the OECD. Even Trump has taken aim at corporate tax avoiders, calling the practice of U.S. firms relocating to cut their bills “disgusting.”
The danger firms now face is that cash-strapped countries each go their own way to reduce avoidance, without coordinating internationally. The global tax landscape is already unnecessarily complex and opaque across different countries, with very little consistency over how businesses should be taxed. It is a nightmare to navigate for companies, encourages multinationals to exploit loopholes, and makes no sense to citizens. Attempts at harmonizing national regimes into a clearer global structure have been slow and politically fraught, and may become even more difficult in light of nationalist tendencies reignited by the pandemic.
It is therefore more important than ever that leading CEOs use their influence to push for sensible reforms that level the playing field, embracing transparency in their own operations. It takes courage to break with the pack, but international regimes built on greater consistency, openness, and fairness will benefit everyone, and fixing our battered economies demands corporates contribute their fair share.
Many will undoubtedly keep trying to avoid doing so. The smarter move will be for companies to back up their purpose statements with principled leadership, paying their dues, supporting the recovery, and helping shape a global tax system that works for all.
Paul Polman is cofounder of Imagine and former CEO of Unilever.
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fortune--2020-05-26--The global liquor industry might not fully recover for another five years

Despite all the reports about consumers stocking up on alcohol, the global liquor industry doesn’t expect to rebound to 2019 consumption rates for at least another few years.
A new report from research firm IWSR Drinks Market Analysis is predicting double-digit declines in 2020 for total global alcohol consumption, a far cry from a 0.1% uptick in volume and 3.6% growth in value in 2019. And the report says it will take until 2024 to bounce back globally to pre-COVID-19 results in 2019—although the agency warns that beverage alcohol volume levels in the U.S. and U.K. won’t recover until after 2024.
And no, notwithstanding the mad rush for getting your drinks delivered, all of the losses during the shutdown of bars and restaurants over the past few months have not been offset by upticks in liquor retail and e-commerce. While it varies by market, approximately a third of U.S. dollar sales for the top 10 alcoholic beverage categories (from beer to wine to various spirits) stems from bars alone.
Mark Meek, CEO of IWSR Drinks Market Analysis, tells Fortune that recovery could take up to five years because drivers for beverage alcohol consumption will be subdued over the medium to long term.
Among those growth drivers were the trade segment (restaurants, bars, nightclubs, etc.), consumption at outdoor events (concerts, festivals, sporting events), international travel, lower tariffs between countries, robust supply chains, and a higher rate of disposable income within the younger legal drinking age consumer segments. All of these channels, Meek says, will be or are already under pressure due to COVID, hence the cautious forecasts.
“While we’re still assessing the full impact of the current COVID-19 situation, it’s very clear that the pandemic is set to cause a deeper and more long-lasting aftereffect to the global drinks industry than anything we’ve experienced before,” says Meek. “Even the downturn following the 2008 financial crisis was less severe than what we are seeing now.”
Hospitality and travel-related channels, severely affected by international travel restrictions, will see a particularly harsh decline in 2020, but those sectors are expected to recover to pre-pandemic levels within the next four years.
Direct-to-consumer sales are going to become a critical lifeline for liquor producers. Across 16 liquor verticals tracked by IWSR, all alcohol beverage categories grew in value faster online versus all other distribution channels in 2019. That trajectory is expected to continue. Beer e-commerce value grew by more than 14%, wine grew by 18%, and spirits grew by 15% last year. Overall, e-commerce channels—worth $21 billion in 2019—are pegged at twice the potential value compared to global travel retail channels (hotels, restaurants catering primarily to tourists, and other hospitality venues) as border restrictions are upheld indefinitely. Up until now, global travel retail partners accounted for 5% to 10% of sales for large spirits brand owners.
Beer is taking a particularly hard hit during the pandemic. Craft beer producers, in particular, are hurting extra without the resources of a global conglomerate and a shorter timeline for the product before it goes bad. Countless craft breweries around the world have been seen dumping gallons upon gallons of beer as higher-priced taprooms and beer pubs remain closed.
But analysts expect beer to rebound better than both wine and spirits, with a compound annual growth rate of 8.1% from 2019 to 2024.
“The aftershocks of COVID should see bigger brand owners increasing their share of the market, with the smaller craft producers either getting acquired by bigger brand owners or going out of business altogether due to lack of financial liquidity and access to markets [and] supply chains,” Meek says.
Wine consumption rates have already been particularly shaky, as millennials have shied away from higher-priced bottles, especially, compared with previous generations. Last year, wine consumption in the U.S. declined for the first time in 25 years.
And yet the big surprise might have some Champagne producers popping bottles sooner rather than later. Sparkling wines were highlighted with stronger rebound expectations than still wine, as analysts observe consumers are increasingly adopting a year-round proclivity for bubbles, rather than saving them for special occasions.
Spirits are more of a mixed bag. Whiskey and gin will likely rebound fastest to pre-COVID-19 levels by 2024, but vodka volumes are not expected to match 2019 results until later.
The two sectors already poised for the most growth within the next few years had nowhere to go but up: hard seltzer and nonalcoholic spirits, the latter of which IWSR didn’t even start tracking until 2018. Both categories posted double-digit growth in 2019 and are not expected to see drops in 2020, but they also each represent fractions of the overall spirits market. It’s also worth noting that both nonalcoholic cocktails and canned hard seltzer drinks are more likely consumed at home—or at least away from bars or restaurants—than any of the other beverage categories, so they don’t suffer the same way because of the shutdown.
That said, volume for hard seltzers and the rest of the ready-to-drink category is expected to grow with a compound annual growth rate of 7.2% from 2019 to 2024.


fortune--2020-05-26--Hertz discloses $16.2 M. in retention bonuses following 10,000 layoffs

On Monday Hertz, the beleaguered vehicle rental service, said it would lay off 10,000 employees in North America as a result of the novel coronavirus pandemic.
On Tuesday, it disclosed in an SEC filing that it had entered into retention agreements with 340 of its employees at the director level and above to disburse about $16.2 million in retention bonuses.
About $1.5 million—$700,000 to chief executive Paul Stone; $600,000 to chief financial officer Jamere Jackson; and $189,633 to chief marketing officer Jodi Allen—was explicitly allocated to members of its executive leadership team.
Hertz said the retention bonuses were made “in recognition of, among other things, the financial and operational uncertainty the company and its employees face as the company navigates unprecedented circumstances arising from COVID-19’s adverse impact on the global travel sector; the substantial additional efforts undertaken by the company’s key employees with a reduced workforce in response to an extremely challenging business environment; the forfeiture of the recipient’s right to participate in the company’s 2020 annual bonus plan; and the risk that the company’s current challenges result in the departure of key employees and the significant benefits to the company of providing incentives for such employees to remain with the company.”
The bonuses are subject to 100% repayment if the recipient voluntarily leaves before March 31, 2021.
The company, based in Bonita Springs, Fla., filed for Chapter 11 bankruptcy protection on Friday after the effects of the COVID-19 pandemic decimated its business. With little domestic and international travel to be had, airport rental services haven’t generated the revenue they usually do. Hertz—as well as competitors Enterprise and Avis—have watched their typically humming businesses fall silent.
But Hertz—No. 326 in this year’s Fortune 500—is in a far more precarious position than its rivals. It has taken on substantial debt in pursuit of pricey acquisitions such as Dollar Thrifty Automotive ($2.6 billion; 2012), which was intended to add leisure travel to Hertz’s core business traveler market. Early in the millennium, Hertz also issued bonds backed by vehicles—which are declining assets, as any car owner knows—as collateral.
As of last week, the company tallied $24 billion in debt, nearly as much as it claims in assets. As of this morning, the company’s shares were trading at less than a dollar—down from more than $20 in February.


fortune--2020-05-26--A tale of two Coopers, one as old as the nation

This is the web version of raceAhead, Fortune’s daily newsletter on race, culture, and inclusive leadership. To get it delivered daily to your inbox, sign up here.
An ugly moment was caught on video in New York City’s Central Park over the holiday weekend: A white person threatened to call the police on a Black person for the high crime of asking her to respect the rules and leash her dog.
Amy Cooper was walking her dog in the Ramble section of Central Park on Monday morning, when she encountered Christian Cooper (no relation), an avid birdwatcher. Unleashed dogs are a specific problem, he told CNN. “That’s important to us birders because we know that dogs won’t be off leash at all and we can go there to see the ground-dwelling birds,” some of the 230 different species of birds that have been seen in the area. “People spend a lot of money and time planting in those areas as well. Nothing grows in a dog run for a reason.”
Amy Cooper, an executive at Franklin Templeton Investments, an asset management firm, had an immediate reaction to the correction. “I’m taking a picture and calling the cops,” she is heard saying in the video taken by Christian Cooper while struggling to contain her dog. “I’m going to tell them there’s an African-American man threatening my life.”
It was a vile threat, and Christian Cooper clearly knew what she meant.
“I videotaped it because I thought it was important to document things,” he told CNN. “Unfortunately we live in an era with things like Ahmaud Arbery, where Black men are seen as targets. This woman thought she could exploit that to her advantage, and I wasn’t having it.”
The summoning of the police to address the presence of a Black person, typically minding their own business, isn’t simply poor judgment or a temporary lapse in civility. It’s part of a broader tactic that white people have long used—often without thinking—to summon the state’s power on their behalf with the intent on restoring racial order.
The last few years have provided a master class in this behavior.
The most famous example was in April 2018, when Donte Robinson and Rashon Nelson were arrested after a Starbucks manager in Philadelphia called the police to report them for, well, sitting in the store. “I have two gentlemen in my cafe that are refusing to make a purchase or leave,” she told the 911 dispatcher. That was not quite true; they had said they were waiting for a friend to arrive. The incident, caught on video by an alarmed bystander, forced Starbucks’ CEO Kevin Johnson to immediately apologize. A month later, the company closed some 8,200 stores for four hours of storewide diversity training, some of which they made public.
But the behavior is widespread. A white student living in a graduate dorm at Yale called campus police to confront and remove minding-their-own-business Black students not once, but twice. A white woman called the police to remove a Black man wearing socks in the swimming pool of their apartment complex. A white woman called the police on an 8-year-old Black girl selling water from a sidewalk shop without a permit. Another in Ohio called the police on a 12-year-old Black entrepreneur mowing a neighbor’s lawn. Police in California, some of whom were in a helicopter, surrounded four Black people as they loaded suitcases in their car after leaving an Airbnb. Neighbors thought it was a robbery. One of them was Bob Marley’s granddaughter, a filmmaker.
And most recently, a Black delivery driver and his coworker were blocked from leaving a gated community in Oklahoma City by a white man who insisted on knowing why they were there. Travis Miller documented the incident in a now-viral Facebook Live video, tears streaming down his face. “My intention was to cover myself in case he called my employer and said I did something other than what I did,” Miller told NBC News. He was also afraid that if the police were called, he’d be pegged as the problem.
And we all know what that means.
“Non-Black people in this country have been fed a steady diet of propaganda from their parents, their schools, their churches, and from the media that tells them that people of color, and particularly black folks and Latinx people are not to be trusted,” Jamilah Lemieux, a cultural critic and writer told The Guardian in 2018. “They’ve been taught that we are criminals, that we are violent that we are predators and think we need to be monitored.”
So tensions boil over quickly when Black people encroach typically “white spaces,” the boundaries of which have been in flux since the Civil Rights era, suggests Elijah Anderson, the William K. Lanman, Jr. Professor of Sociology at Yale University.
His research shows that still-widespread segregation impacts the white and Black psyche in different ways. Progress aside, “[t]he wider society is still replete with overwhelmingly white neighborhoods, restaurants, schools, universities, workplaces, churches and other associations, courthouses, and cemeteries, a situation that reinforces a normative sensibility in settings in which Black people are typically absent, not expected, or marginalized when present.” White people typically avoid Black space, he writes, but Black people are required to navigate the white space as a condition of their existence.
And if they fail to navigate that space correctly, their existence may be threatened with the help of the state.
As we discuss sociology today, Amy Cooper is having different discussions. She had been put on administrative leave, after the viral video hit Twitter yesterday, making her a trending topic and temporarily crashing her employer’s website. Her rescue dog has also been surrendered to a shelter. She was even forced to “apologize.”
By press time, Amy Cooper had been fired. “Following our internal review of the incident in Central Park yesterday, we have made the decision to terminate the employee involved, effective immediately. We do not tolerate racism of any kind at Franklin Templeton,” the company said in a tweet. Next year, when something similar happens, her name will be evoked. In five years, her story will be part of someone’s Master’s thesis, a permanent part of a canon without end.
But Christian Cooper is still alive, and that’s the good news here. Despite the drama, he is determined to reclaim the Ramble as a public space available to all. When asked the obligatory, “do you forgive her” question, he responded: “If it’s genuine and if she plans on keeping her dog on a leash in the Ramble going forward, then we have no issues with each other.”
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
On point
Thousands of Floridians are now cleared to register to vote before September A federal court has blocked a Florida state law that required formerly incarcerated people with felony convictions to pay court fines and fees before they can exercise their legally affirmed voting rights. Florida lawmakers passed the restrictive measure after voters approved a constitutional amendment in 2018 that restored voting rights to any individual who had completed their sentence, including probation and parole. In his ruling, U.S. District Judge Robert L. Hinkle referred to the 24th Amendment, which abolished poll taxes and was ratified in 1964.
Washington Post
In the Navajo Nation, this year’s high school graduation is bittersweet The Navajo Nation has a higher coronavirus infection rate than any U.S. state, and tribal authorities have issued strict guidelines to shelter in place to attempt to stem the infection. But for the young adults graduating from Monument Valley High, losing the graduation ceremony was a blow. More than half come from homes without electricity or running water, and most don’t have the internet to do schoolwork from home. “So, when the kids are able to make it to graduation, I feel like it’s kind of a celebration of life, of still being successful and thriving to some extent,” says Principal Spencer Singer, who marked the moment by arranging solo photos with students receiving diplomas in front of a green screen in the school’s foyer.
KUER
“Skyrim Grandma” dials back her playing due to “internet arseholes” Shirley Curry, an 84-year-old widow and grandmother from Ohio, has become a quiet force in the gaming community as the world’s oldest professional streamer, popular for her streams and videos as she plays The Elder Scrolls V: Skyrim. “Good morning, grandkids, we’re back with Jhondar, and he got the boneyard keeper,” begins one such charmer. The avid gamer, who has 834,000 subscribers and who is an internet treasure, plans to scale back her posting due to irritating and hurtful comments, much of which sounds like critiques of her style and other gamesplaining nonsense. The pressure of daily content producing was also bothersome, particularly in light of the commentary. “I’m wasting my time, and it’s stressing me out” she tells Kotaku. “I’m trying to get my health under control. I’m not trying to be cranky.”
Kotaku
Coronavirus in the community
On background
Why is coronavirus killing so many Black people? We know why, says Sabrina Strings, Ph.D., an associate professor of sociology at the University of California at Irvine. She begins this must-read opinion piece with an anecdote that many will recognize: As the only Black expert in a room full of earnest people trying to solve a Black problem. In this case, why so many Black people suffer from preventable and treatable diseases. Her answer was slavery. “The era of slavery was when white Americans determined that Black Americans needed only the bare necessities, not enough to keep them optimally safe and healthy,” she writes. “It set in motion Black people’s diminished access to healthy foods, safe working conditions, medical treatment, and a host of other social inequities that negatively impact health.” She asks important questions about the now widespread idea that severe obesity, as defined by a body mass index greater than 40, is a complicating factor in COVID-19 disease. There are racist ideas embedded in those assumptions, too.
New York Times
Racist white voters abandon democratic ideals when it appears to benefit anybody but them A study which uses data from the World Values Survey, a global network of social scientists collecting how values change and impact society, found that when white Americans embrace intolerant and racist beliefs, they gravitate to authoritarian rule. Put another way, when a political system includes marginalized people, they don’t like democracy much anymore. The research was conducted by political scientists Steven V. Miller of Clemson and Nicholas T. Davis of Texas A&M; it started as a blog post, then a working paper, and has now been released as a peer-reviewed paper titled "The Effect of White Social Prejudice on Support for American Democracy.” The data they studied were collected from 1995 to 2011, so it doesn’t chart the Trump era, but it does predict it. Racially intolerant voters have long seen violent authoritarianism as an option in "a preference for the sort of white-ethnocentrism that imbued much of the functional form of democracy for the better part of two centuries," Miller told NBC News.
Steven V. Miller
When personality and bias collide Quinisha Jackson-Wright does a great service by debunking the use of unscientific personality assessment tools, specifically the Myers-Briggs Type Indicator (MBTI), as a strategy for managers who want to understand the strengths and styles of the people who work for them. “Do they fulfill their intended purpose of helping managers get to know their team’s working styles, or simply reinforce stereotypes that encourage managers to seek out people like themselves?” she correctly asks. Particularly at risk to be pigeonholed and marginalized are women, introverts, introverts of color, and immigrants who may be bringing non-majority cultural norms to the workplace. So, a lot of people. While there are truly useful and unbiased personality assessment tools in the marketplace (I’ve taken quite a few) none of that matters if the results aren’t filtered through a welcoming environment run by well-trained leaders. “While the M.B.T.I., and the organizations that use the assessment, promote the idea that there’s no ‘wrong’ personality, real-life workplace conflicts do not always play out so objectively.” Excellent fodder here.
New York Times
Today's mood board


fortune--2020-05-26--Apple to reopen 100 more U.S. stores this week

Apple said it will reopen about 100 more retail stores in the U.S. this week, with more than half offering curbside pick-up service only.
“This week we’ll return to serving customers in many U.S. locations,” Apple said Tuesday in a statement. “For customer safety and convenience, most stores will offer curbside or storefront service only, where we provide online order pick-up and Genius Bar appointments.”
The company said the openings would happen across Arizona, California, Florida, Georgia, Indiana, Kansas, Kentucky, Nevada, Missouri, Michigan, New Mexico, Ohio, New York, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Wisconsin, Virginia and Utah.
Stores that let customers inside require temperature checks, social distancing and masks, Apple has said.
The company has about 270 stores in the U.S. The company has already reopened locations across Australia, Canada, Austria, Germany, South Korea, Italy and Switzerland, and plans to start opening stores in Japan and Sweden this week.


fortune--2020-05-26--Dear Kevin Mayer: Here is what parents want you to change at TikTok

Kids love TikTok. Parents, not so much.
Last week the popular lip-synching video app announced the appointment of a new chief executive officer: former Disney streaming chief Kevin Mayer. The exec, once one of the top candidates for the CEO job at the Mouse House, will also serve as COO of ByteDance, the Chinese tech company that owns TikTok. His new role won’t be an easy one—safety and privacy concerns have plagued the app over the past few years, despite its popularity with younger people. Now Mayer must “Disney-fy” TikTok, making it more family-friendly in the eyes of parents, without destroying what makes it so addicting with younger users.
What changes would parents most want the new CEO to make when he officially takes the role on June 1? We asked a few of them to find out.
Develop an age-appropriate filter
Even with a private account and a “friends-only” policy for sharing their own homemade videos, kids are still exposed to all sorts of other clips on TikTok. “They can still see all the videos of ‘randos,’” says Shelly Ryan, a teacher whose two daughters use the app. Several other parents, especially those raising young girls, also say they wish TikTok could provide a filter for age-appropriate content for their kids. As one parent told Fortune: “TikTok has become ‘sexy dance university’ for a lot of young girls.” (The company does offer a “limited” version for younger users, but parents complain that their kids don’t want to use it because it restricts too many features.)
Become a better partner for parents
It’s really that simple: Create more opportunities for dialogue with parents and allow them to voice their concerns. “The responsibility [to make apps like TikTok safer] is both on the app makers and on the parents,” says Micaela Birmingham, a New York–based writer-director and executive producer of a parenting site, ScaryMommy.com. “But we’re all asleep at the wheel when it comes to protecting our kids.” More dialogue between the two sides could be the first step in working together to make TikTok safer—and getting parents to be more comfortable with their kids using the app. “I’m hopeful that someone coming from an iconic brand like Disney can come in and do a better job at that,” says Birmingham.
Educate kids on the risks of social media
Birmingham likens the appeal of social media to a beach ball floating at the deep end of the pool. “Small kids see it and they want to jump in and play because it looks fun,” says Birmingham. “But they don’t know how to swim yet.” Just like the tobacco industry ultimately became responsible for informing the public on the health hazards of smoking, social media facilitators like TikTok could help to increase awareness of some of the dangers of their platforms, particularly for young users who don’t yet know how to make good decisions online.
Don’t sell our kids’ data (and if you do sell it, tell us)
Unsurprisingly, parents don’t want their kids’ private information to be harvested, stored, or sold to marketers. (Surprisingly, the American parents interviewed for this article didn’t feel strongly about whether this data lives on servers in China or in the U.S.—they just don’t want it to be saved and profited from.) TikTok is already the subject of multiple regulatory probes in several countries. In the U.S., it settled a complaint with the Federal Trade Commission alleging that the company illegally collected personal information from children. In short: Parents want the free app to find another business model, or at least to be more transparent about its existing one. “I just assume every social media company has all of your social information anyway,” says Stefania Pomponi, a mom who runs an influencer marketing agency.
Encourage less screen time
Sound completely counter to TikTok’s financial incentives? It is. But if the company wants to generate some goodwill from parents (who are ultimately—or at least theoretically—in control of their kids’ device usage), it might want to explore ways to promote its brand offline. “My 9-year-old doesn’t have a TikTok account primarily because he doesn’t have a phone,” says Pomponi, who also has a 15- and 17-year-old. “He doesn’t need to see another screen.” TikTok could host more real-world events (in a post-pandemic future) or find new ways to encourage kids to be creative while offline.
Yes, offline.