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Friday, May 31, 2019

Time to Get CEOs Out of Politics, Including at Disney

by Ray Keating
May 31, 2019

I’m not “a good old days” kind of guy. Make no mistake, I definitely appreciate and learn from history, and from the wisdom of those who have come before me. But I tend to be forward looking in career and personal matters, that is, generally excited and optimistic – tempered with realism – about the future.

However, I do find myself longing for a time in the past – shall I call it the good old days? – when CEOs generally kept their mouths shut about politics. They seemed to grasp that staking out ground on controversial political topics was bad for business. Playing politics meant that you were bound to piss off a good chunk of your customers. So, instead they stayed focused on making the best product possible, and left politics and such to their personal lives, or better yet, until retirement. Crazy, right? 

Alas, those days seem to be long gone, as we are in an age of corporate activism. Albeit, most CEOs do, in fact, just focus on creating valued goods and services. But various prominent CEOs make news, grab headlines, and win kudos from respective groups by political grandstanding.

That’s been the case with much of Hollywood regarding pro-life legislation being passed in various states. Georgia is hot right now, as the state passed a law barring abortions once a baby’s heartbeat could be detected. The Left, of course, views abortion as some kind of ultimate good, choosing to ignore the ugly reality of extinguishing a life. And of course, much of Hollywood is populated by the Left. So, we have business executives weighing in, and promising to pull filming of movies and shows from the state.

That includes Disney CEO Bob Iger, who told Reuters, “I think many people who work for us will not want to work there, and we will have to heed their wishes in that regard. Right now we are watching it very carefully.” Hmmm. It couldn’t be that this is simply Iger making decisions for the company based on his own personal political opinions, or the views of some of his friends, or could it? After all, I would imagine that there are a good number of Disney employees who are pro-life, and might actually appreciate the Georgia law. And of course, ultimately, Iger works for the owners, i.e., the shareholders. Do Disney’s shareholders really want Iger spouting off on such matters as the company CEO, not to mention making decisions for the company according to his political opinions?

By the way, Netflix is playing the same game with Georgia.

Why is Georgia such a big deal in Hollywood? Well, it turns out the state serves up big tax breaks for movie and TV productions.

As an economist, here’s my solution. First, Georgia should eliminate special tax breaks for certain companies or industries, including Hollywood, and instead focus on broad tax and regulatory relief that benefits all entrepreneurs and businesses, and will do much more in terms of spurring the state’s economy forward. Second, shareholders need to wake up, and rein in their activist CEOs. It’s time to make clear that the CEO is here to run the business on behalf of the owners, not to play politics.

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels. He can be contacted at  raykeating@keatingreports.com.

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