In today's WSJ, we learn that Salesforce CEO Marc Benioff is using his position--and company resources--to advance a variety of liberal causes:
“Marc rallies CEOs when business and trade groups are much slower to act, particularly on noneconomic issues,” says Dow Chemical Co. chief Andrew Liveris, who weighed in against the North Carolina law and says Mr. Benioff’s influence led him to get personally engaged in social activism.
The 51-year-old Mr. Benioff earlier this year helped push Georgia’s governor into vetoing that state’s bill that would have let faith-based organizations decline services or fire employees over religious beliefs after the U.S. Supreme Court ruling that backed same-sex marriage. Last year, he and other CEOs were instrumental in persuading Indiana’s governor to revise a similar law. He is now pressing cohorts to back measures to close the gender pay gap.
He argues that:
“The next generation of CEOs must advocate for all stakeholders—employees, customers, community, the environment, everybody,” Mr. Benioff says, “not just for shareholders.”
Granted, if advocating for non-shareholder stakeholders redounds to shareholder benefit, that's fine. But the implication here is that Benioff is willing to make trade-offs between stakeholder and shareholder interests. If so, we must flag him.
Salesforce is a Delaware corporation, so let's see what Delaware's Chief Justice Leo Strine thinks:
It is not only hollow but also injurious to social welfare to declare that directors can and should do the right thing by promoting interests other than stockholder interests. ...
Despite attempts to muddy the doctrinal waters, a clear-eyed look at the law of corporations in Delaware reveals that, within the limits of their discretion, directors must make stockholder welfare their sole end, and that other interests may be taken into consideration only as a means of promoting stockholder welfare. ...
The understanding in Delaware is that [our decisions] could not have been more clear that directors of a for-profit corporation must at all times pursue the best interests of the corporation's stockholders, and that the decision highlighted the instrumental nature of other constituencies and interests. Non-stockholder constituencies and interests can be considered, but only instrumentally, in other words, when giving consideration to them can be justified as benefiting the stockholders.
Leo E. Strine, Jr., The Dangers of Denial: The Need for A Clear-Eyed Understanding of the Power and Accountability Structure Established by the Delaware General Corporation Law, 50 Wake Forest L. Rev. 761, 767 (2015).
Of course, as Strine acknowledges that:
... it is true that the business judgment rule provides directors with wide discretion, and thus enables directors to justify--by reference to long-run stockholder interests--a number of decisions that may in fact be motivated more by a concern for a charity the CEO cares about, the community in which the corporate headquarters is located, or once in a while, even the company's ordinary workers, rather than long-run stockholder wealth. But that does not alter the reality of what the law is.
Yet, the bottom line is that Benioff is on the verge of admitting that he'll put his own political and policy preference ahead of the interests of Salesforce's shareholders.
Somehow, however, I doubt whether the folks who have been complaining about corporate influence in politics will start criticizing Benioff's activism the way they do, say, that of the Koch Brothers.
