DEI, ESG, CSR: the "alphabet soup of extortion”

Andrew Olivastro is the Vice President of Outreach for the Heritage Foundation. Heritage believes people should not be made to feel bad when they buy or use products or invest in companies that deride their beliefs and take controversial stances against their values.

I recently talked with Andy, on my podcast "Meeting of Minds" and he made the case that the left agenda in corporate boardrooms has gotten overextended and is collapsing in the face of public backlash. Below are a few highlights from that discussion, lightly edited for clarity and length.

I associate you with the new direction that I'm seeing, that takes issues to the corporate boardroom. Conservative think tanks in Washington have understandably had a focus on politics and policy. That's important. And then there's also been litigation: Alliance Defending Freedom is focused on that, but you guys do amicus briefs: that's also important because leftis m has made courts very important, more important than they supposed to be, Constitutionally. But while all that was going on, we were winning elections. We are winning policy debates. We were winning court cases. And then we were losing elections for Boards of Directors and proxies at corporate annual meetings, and we essentially lost corporate America.

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Andy: I agree. Our friend Justin Danhof has a saying that corporate America and the conservative movement divorced about 40 years ago. But we just found the paperwork in the top drawer of the desk.

Jerry: And they've been carrying on with somebody else. I've seen the Daily Signal do a lot of coverage on this issue, on what we would call "woke capitalism."

Andy: Yes, and we wanted to stand up some coalitions. We wanted to work in this space. We wanted to look at what was going on in corporate America and in the business community. And one of the things that that I really liked about working with you, Jerry, was that we're not the walkaway people, right? We're not going to leave and walk away. We're not going to take our ball and go home.

Jerry: I think the analogy when I've talked about that is Jesus and the Rich Young Ruler. They have a confrontation (over socialism by the way, it's not, it's not over whether wealth is good or bad). The Rich Young Ruler, he's a senator. I'm not going to bore you with that but I wrote a book about it, so I'm going to bore everybody else with it. So they clashed over a lot of these issues but who walked away? It was it was the bureaucrat. It was the senator who couldn't stand the truth. Jesus didn't walk away. So we're not the ones who should be walking away from these companies.

I think Heritage has probably done a lot better than most of the conservative institutions in Washington in responding to grassroots concerns. I was involved with the Tea Party Movement and Heritage was right there, right away, when a lot of folks—and I won't mention other names—but a lot of folks were like "oh, I don't know, the wrong kind of people are there." Heritage said: here's research on the Constitution, here's how it works. So, to what degree is this coming from the grassroots saying "hey, listen we're really concerned about woke capitalism. We want you to speak to it." How much is this sort of demand driven by by the people?

Andy: I think we've captured something that is demand driven by the people. But I would say that there are facets to it that probably don't manifest themselves at kitchen table conversations across America. At least they didn't two years ago. The example would be: if I want to go buy a brand of sneakers, or I want to go shop at a store, I shouldn't have to feel bad about it. I shouldn't have to walk through the door or go online and think that the company doesn't have the same values as I do.

In the past, I think people would just boycott the company, and certainly that can be effective, but what if we don't take our ball and go home? What else can we do? Well, we can go engage those companies. We want to say: you're making bad decisions, you're doing the wrong thing, you're being co-opted by the left. And companies heretofore haven't had to deal with that.

You have been so active and you've been a leader in shareholder activism and driving this conversation. Inside the meetings that our company leadership. They have to be responsive, they have to listen.

Jerry: That's an important point. And I have to mention that I was mentored by Justin Danhoff who does this better than anybody. Justin introduced us. I'm doing it, but I'm not first, or second into battle either.

Something's occurred to me: a lot of the conversation is about cancel culture and what that amounts to is: the left has a set of arguments that are extremely fragile. The prevalence of the arguments depends on the lack of challenge. So a conservative comes to campus, and the answer is "shut up, and if you don't shut up, we're going to scream so loud that effectively we've shut you up because no one can hear you." They shut down the debate. Nobody who will win a debate shuts down a debate.

But it happens on college campuses all the time and it kind of happens on mainstream media . Serious conservative voices can't get on mainstream media. So we can't have the debate. But in corporate life we can have the debate. Securities law says, we can come, we can ask, we can advance a proposal, we can vote, we can force the debate. So all of these issues where we feel locked out, where we've got the better arguments, but we can't deliver them. Well, shareholder activism allows us to deliver all those wonderful arguments that the Heritage Foundation has in his policy papers.

Andy: I think, that's right. To tie a few threads of that together: you talk about the commanding heights of the culture, where the right maybe lost the business community or is at the point of possibly losing the business community to the left. Whether the business community, should be right or left, or should just be a neutral player in the market is a sort of different question. But the idea that the commanding heights of culture would dictate that you can't have these conversations in the workplace. I think an employee shouldn't feel afraid to bring their ideas into the workplace.

Viewpoint Diversity is of paramount importance. If I'm a shareholder in a company, or I'm the CEO, or I'm an executive in a corporation and I'm spending two billion dollars or more a year on research and development, I want the best ideas. I don't want people feeling stifled, I don't want people feeling like they can't express themselves. And if you have that kind of environment, you will actually lose the opportunity to be innovative in the marketplace.

Many corporations would say, "well, we are diverse because we have people in every market that represent our company and can kind of bring intelligence back to us." That's not the same thing as viewpoint diversity. And what happens now with the sort of diversity identity bingo that happens inside Corporate America? That should be an embarrassment to every corporate executive. They deserve the scrutiny, if they endorse it, and they deserve ridicule, if they endorse it.

Jerry Bowyer is financial economist, president of Bowyer Research, and author of “The Maker Versus the Takers: What Jesus Really Said About Social Justice and Economics.”

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