As three of America's largest banks kicked off the US financial industry's annual gatherings this week, conservative activist investors are pummeling them over "woke" Marxist agendas, as corporate boards have become swept up in "stakeholder capitalism" - the World Economic Forum-endorsed concept that companies shouldn't just serve their shareholders, but society at large.
Stakeholder capitalism runs contrary to the demands of U.S. corporate law, which holds that directors and executives have a duty to one master: shareholders. Milton Friedman worried that a shift from shareholder primacy would cause companies to operate less efficiently and be less profitable, leaving investors, workers and consumers worse off. -WSJ
Perhaps most notably, BlackRock CEO Larry Fink issued an open letter in January to CEOs explaining that companies they invest with will soon have to abide by sustainability rules governing climate change, labor practices and other issues.
"Stakeholder capitalism is not about politics ... It is capitalism," wrote Fink - who just last year helped elect three 'climate-focused' candidates to Exxon Mobil's 12-member board.
Conservative investors aren't having it according to Bloomberg, which reported that both Citigroup and Bank of America were nailed at annual shareholder meetings over vows to institute diversity quotas. Of note, BofA encouraged employees to be "woke at work," and told white employees to "decolonize your mind" and "cede power to people of color," according to Fox News, citing investigative reporter Christopher Rufo.
One group of activists, the Free Enter Prise Project at the National Center for Public Policy Research, submitted shareholder proposals to Citi and BofA to audit whether their diversity efforts are themselves discriminatory. The Free Enterprise Project's Sarah Rehberg said during Citigroup's meeting that a woke agenda means "the company places more value on whether an employee is a woman or a traditionally underrepresented minority than whether that individual has an objective amount of experience or educational qualifications."
At Wells Fargo - which originated the most loans to the fossil-fuel industry last year, conservative activists called the bank out for donating to groups fighting climate change, "which is just Marxism dressed up as environmentalism."
"Wells Fargo needs to take a hard look at the fix that Disney finds itself in," said the activist, Paul Chesser - director of the conservative National Legal and Policy Center's Corporate Integrity Project.
"Stay out of politics and properly serve all its customers and shareholders."
Meanwhile, the tide does seem to be turning:
A call for Wells Fargo to examine whether it’s doing enough to support racial equity also fell short, but it garnered 36% support. At Citigroup, more than a third of shareholders supported a proposal that would require the bank to report how it protects Indigenous people.
That said, in response to how Citigroup will avoid Disney's situation, CEO Jane Fraser doubled down.
"We realize not all stakeholders believe in the positions we take and that there are certain stakeholders who believe it is not the role of a company to make such statements," she said on Tuesday. "We respectfully take the view that there are times when, as an employer of more than 220,000 people, it is appropriate to engage and support how our colleagues are treated."