Author Archives: Sarah Wall

For the last several years, large asset managers such as BlackRock and JP Morgan have increasingly shifted their business priorities. Instead of profit and shareholder value, it seems “environmental, social, and governance” (ESG) ratings now get top billing. At least, that’s how their public statements read. We’ve discussed at length about how ESG ratings are too arbitrary. They result in no accountability for executives in the C-suite.

America’s biggest banks have not been shy about their commitment to what they call “sustainable investing.” Wells Fargo, Bank of America, and others have made Environmental, Social, and Governance (ESG) metrics key to their business models. That includes a commitment to analyzing how well potential recipients of their loans adhere to ESG metrics. What does that mean in practice? Imagine it. You need $2 million in capital from Wells…

The biggest story on Wall Street for the last few weeks has been the dominance of the “little guy.” Stocks worth $6 per share a few months ago – most famously, GameStop – suddenly skyrocketed to over $360 per share. Incredibly, this had little, if anything, to do with a real shift in GameStop’s business or operations. GameStops are typically located in shopping malls; while malls were declining before COVID-19,…

There are several traditional barometers for measuring a company’s success. They include their profitability, the value customers derive from their products, and their delivery on promises to shareholders. But every year, those traditional measurements fall further and further down companies’ priority lists. That’s not a coincidence. For the past decade, political activist shareholders have sought to force companies to take up objectives more reminiscent of politics than financial success.

No one knows a company like its CEO. That should go without saying, but in the increasingly politicized world of shareholder advocacy, it’s a truth lost to a corporate culture of “wokeism.” CEOs, boards of directors, and other leaders of a company are being sidelined in favor of political actors offering shareholder resolutions. These activists use resolutions to pressure companies to take up their political preferences. Their preferences — things…

Just before Christmas, strategy + business declared stakeholderism the new corporate law of the land. They published a piece boldly entitled, “The stakeholder-shareholder debate is over.” Is it? And if is, is that a good thing? Fundamentally, stakeholderism isn’t a stand-alone philosophy on how to a run a business. Stakeholderism is really about opposition to Milton Friedman’s declaration on shareholder primacy. Friedman maintained that companies promote social good best when…

When it comes to setting the course on Wall Street’s priorities, not many firms can compete with BlackRock. The firm is the world’s largest asset manager, with $7.81 trillion in assets under management. It’s to be expected that they would be enormously influential in the corporate sphere. It’s somewhat more surprising to see BlackRock take on the role of issue advocate with increasing audaciousness. But that issue advocacy is…

It’s not a surprise green energy advocates have blacklisted oil companies and natural gas producers. That much is obvious from a US Senate report from the Special Committee on the Climate Crisis. As an aside, it’s somewhat more surprising to see the inclusion of nuclear energy plants on the blacklist. After all, nuclear plants produce some of the most reliable carbon-free energy. But choosing winners and losers based on…

Every year in January, some of the world’s most powerful, wealthy, and influential people descend on the tiny resort town of Davos, Switzerland. They represent the pinnacle of business, culture, and politics, and they come for the World Economic Forum (WEF). Together, they spend four days discussing their grand plans to improve society. At least, that’s what observers might conclude, based on the 2021 theme: “The Great Reset.” Klaus Schwab,…

The coronavirus pandemic has changed American society in more ways than we can count. But at least one outcome was surprising, and it will also be enormously beneficial to many Americans’ financial futures. Despite a huge downtown in the global economy, the growth in individual investors ballooned. Trading in the market without the go-between of a bank, mutual fund, or financial advisors had huge opportunities this year. Individual investors made…