Eastern Railroad Discussion > Shareholders aren't the only group you have to please...

Marc Benioff, CEO and co-founder of Salesforce, asserts in a new book that "CEOs who just focus on pleasing shareholders won't be CEOs very long".  He advocates pleasing and engaging a much wider constituency of employees, communities, public schools, homeless people, etc

You want to create a company that people want to do business with. That they're happy to be a part of. That shares their values, etc That delivers benefits to the wider community.. Mr Benioff went on to say that community service / volunteering with pay, free use of company products by non-profits, etc is part of the Salesforce program.

The CEO has been on a crusade to broaden the way companies engage with their employees, and with their customers / communities.  Focusing on the narrow goal of boosting shareholder value is a trap, he asserts.  Salesforce has  been a consistent high performer in recent years, attracting quality employees and delivering generally good services.

https://www.cnbc.com/2019/10/16/marc-benioff-ceos-will-not-keep-jobs-without-new-approach-to-capitalism.html

Sounds like another touchy feely new ager who has gotten rich basically selling "air" with little competition.  Most of this advice has little application in the 'regular world" where most of us have to compete.   Wait ten years when there are 50 other companies doing the same thing they are and see how magnanimous they are.

Yep salesforce is a software unicorn....I'd like to think what they say is true, and on some level it is...but as soon as you try to operate this way....corporate raiders bang on the door wanting more dividends!

The test will come when a company focused on more than shareholder value successfully holds out against a raid in the name of increasing shareholder value.  

Lackawanna484 Wrote:
-------------------------------------------------------
> Marc Benioff, CEO and co-founder of Salesforce,
> asserts in a new book that "CEOs who just focus on
> pleasing shareholders won't be CEOs very long". 
> He advocates pleasing and engaging a much wider
> constituency of employees, communities, public
> schools, homeless people, etc
>
> You want to create a company that people want to
> do business with. That they're happy to be a part
> of. That shares their values, etc That delivers
> benefits to the wider community.. Mr Benioff went
> on to say that community service / volunteering
> with pay, free use of company products by
> non-profits, etc is part of the Salesforce
> program.
>
> The CEO has been on a crusade to broaden the way
> companies engage with their employees, and with
> their customers / communities.  Focusing on the
> narrow goal of boosting shareholder value is a
> trap, he asserts.  Salesforce has  been a
> consistent high performer in recent years,
> attracting quality employees and delivering
> generally good services.
>
> https://www.cnbc.com/2019/10/16/marc-benioff-ceos-
> will-not-keep-jobs-without-new-approach-to-capital
> ism.html

Bob Wilcox
Charlottesville, VA
My Flickr Shots

bobwilcox Wrote:
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> The test will come when a company focused on more
> than shareholder value successfully holds out
> against a raid in the name of increasing
> shareholder value.  


Conrail helped Pennsylvania write a law wherein CEOs must consider all stakeholders i.e. not just shareholders in evaluating takeover bids.  That was more than 20 years ago.

BobE

Thanks for remembering that,BobE.

When the division of Conrail came about, NJ Governor Whitman was able to use those provisions (and others) to force the creation of the "Shared Assets" terminal railroad in several densely developed areas and ports.

Ken Chenault, the former CEO of American Express, is the subject of a profile in the Wall Street Journal today. He argues that "a new generation of management, better attuned to employees" will deliver better results for share owners.

Engaging employees, and offering training etc to up-skill them for future challenges, etc.

My post that related factual information about Benioff was deleted.

Former BNSF CEO Matt Rose was saying essentially the same thing when he was making his “farewell tour” late last year.

Posted from iPhone

about 65% of Salesforce's stock is owned by mutual funds and pension plans. I was interested to see that General Colin Powell is on the board, and owns 30,000 shares.

RRTom Wrote:
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> My post that related factual information about
> Benioff was deleted.

No, your ignorant, homophobic post was deleted.

Prove that anything I said was not factual.  Send me a private message if you want.  I'm not afraid to have a discussion.

Lackawanna484 Wrote:
-------------------------------------------------------
> Ken Chenault, the former CEO of American Express,
> is the subject of a profile in the Wall Street
> Journal today. He argues that "a new generation of
> management, better attuned to employees" will
> deliver better results for share owners.
>
> Engaging employees, and offering training etc to
> up-skill them for future challenges, etc.

All of this is pretty much  true, but the hard cold fact is that once you take a company public, you have effectively sold its soul, and management no longer has the absolute free hand to run the business in the best interest of the company, the employees, the public at large or anyone else.  You now have a legal obligation to the stock holders, and any decision you make, no matter how correct or magnanimous may come into question if that decision can't be shown as enhancing shareholder value. When you have situations like CSX, where an activist investor can basically hijack control of the company by owning a rather insignificant percentage of the stock, this becomes a very real concern.  Wall Street continually sends the message that it doesn't give a damn about the 'human factor" when it clashes with shareholder return.  As a side note, For those of you that follow NASCAR, you may be aware that the France family that owns NASCAR lock stock and barrel took their race track company, International Speedway Corporation back private after over a decade as a public company.  One of the primary reasons?  By being a public company, even though the France's maintained majority control, it handcuffed them from making business decisions that might be good for the sport of stock car racing overall but not necessarily for International Speedway Corporation and it's minority stock holders. Now they have the ability to "do the right thing" even if it means less revenue for ISC. 



Edited 2 time(s). Last edit at 11/20/19 21:54 by junctiontower.

I would agree with much of junctiontower says. And, I've long advocated employees owing 10% to 15% of their company. Without solid equity, you are disposable.

Companies where a family owns solid interest and control (Koch, Tesla, Trump, Zuckerberg, Microsoft, etc) can be well run. Or not.

Posted from Android

Trump runs a tiny little realty company. Hardly on a scale anywhere near the others mentioned, and run like a mob family, not a typical corporation.