The muted reaction from American corporations in response to the Supreme Court's recent ruling striking down Roe vs. Wade is a classic case of Sherlock Holmes' the dog that didn't bark in the night.
It's evidence that companies have witnessed the recent popular backlash to corporate CEOs' forays into political activism and don't want to experience it themselves.
That's a relief for ordinary Americans sick of corporate America playing politics. More broadly, this silence is a victory for corporate shareholders whose savings and retirement accounts have been threatened by divisive corporate activism. Unfortunately, shareholders still face threats on other woke capitalism fronts.
Only by continuing to fight back can we protect our savings from even more financial market turmoil at the worst possible time. Stocks just had their worst first half of the year in 50 years.
"Companies had more than a month to formulate a response to the end of federal abortion rights in the United States," reports the New York Times. "But when the final decision arrived in Dobbs v. Jackson Women's Health Organization... relatively few had anything to say about the outcome."
Indeed, when companies decided to speak out at all on the ruling, their responses were generally milquetoast. Consider the representative remarks by Johnson and Johnson: We "believe health care decisions are best determined by individuals in consultation with their health care provider."
These companies have likely observed what Disney learned the hard way. In a Mickey Mouse move, the company recently decided to wade deep into Florida's culture war swamp. It strongly opposed a new law in my home state preventing school district employees from discussing transgender issues with primary school students. Disney CEO Bob Chapek said that the law is a "challenge to basic human rights" and promised to fight it.
The company paid the price for this politicking. The Florida state government revoked its special governing status that saved it tens of millions of dollars each year. Customers have organized boycotts of company theme parks and canceled their Disney streaming service.
Yet the biggest victims of Disney's woketavism are company shareholders. Disney's stock price is down more than 30% since Chapek's remarks, nearly three times the broader market. Investors are clearly worried about how the company's controversial political position will impact profitability. Their fears aren't unfounded. A 2020 study published in the Journal of Marketing finds that corporate activism often negatively affects company stock market performance.
Disney is one of the largest companies in the country, and it is part of numerous passive index funds that savers and retirees rely on to protect and grow their assets. By taking this controversial stance, Disney's CEO has effectively said his political opinion is more important than shareholder value. Yet instead of holding him accountable, Disney's board of directors voted last week to extend his contract for another three years.
Under the radar, shareholders also face another significant woke capitalism threat: environmental, social, and governance (ESG) requirements. ESG investment funds place activist goals regarding social justice, identity politics, and climate above profitability in violation of their legal fiduciary duty to maximize shareholder returns.
Big investment funds like Blackrock are using their market power, and left-wing politicians are using their political power to bully companies into adopting ESG priorities. However, ESG requirements such as those that prioritize race and gender over merit can weigh on profits on which stock market performance is based.
It's time for ordinary investors and retirees to turn their anti-woke fire from activist CEOs to the broader ESG movement. Only widespread backlash can halt this destructive and potentially illegal practice. CEOs speaking out on controversial political issues are the most obvious form of woke capitalism, but ESG requirements are the most pernicious. The clues are there for anyone who dares to look.
(Joseph Semprevivo is an American business executive who founded Joseph's Lite Cookies, an international food product company. He is also Professor of Finance, Real Estate & Business at Indian River State College, author of Madness Miracles Millions, and a member of Job Creators Network.)