1 00:00:05,760 --> 00:00:08,000 Speaker 1: Welcome to Chilliance. I'm Joel Webber and I'm Eric. I'll 2 00:00:08,080 --> 00:00:16,479 Speaker 1: tunis Eric. You're in a different location than usual, and 3 00:00:16,640 --> 00:00:20,480 Speaker 1: you've tested positive. I did, yeah, and finally got you. 4 00:00:20,560 --> 00:00:23,360 Speaker 1: How you doing? I held out longer than most. I 5 00:00:23,400 --> 00:00:25,760 Speaker 1: had a good run, Joel Um. A lot of people 6 00:00:25,800 --> 00:00:28,560 Speaker 1: around me got it, and I, in fact, the team 7 00:00:28,600 --> 00:00:31,159 Speaker 1: called me the COVID dodger for a while because I 8 00:00:31,200 --> 00:00:33,239 Speaker 1: had come close to it and never gotten it. But 9 00:00:33,920 --> 00:00:36,680 Speaker 1: it just shows you cannot outrun it for forever, and 10 00:00:36,720 --> 00:00:41,160 Speaker 1: so stem I am the COVID dodger and still COVID free. Yeah, 11 00:00:41,440 --> 00:00:43,760 Speaker 1: I'll give it to you. You're you're the chosen one, Okay. 12 00:00:43,800 --> 00:00:48,040 Speaker 1: So Eric, we've long talked about e s G on 13 00:00:48,080 --> 00:00:53,279 Speaker 1: the program Environmental Social Governance. It's it's a space that 14 00:00:53,440 --> 00:00:56,480 Speaker 1: you've expressed caution about a business week. We've done a 15 00:00:56,520 --> 00:00:58,840 Speaker 1: lot of reporting about it, both on the positive and 16 00:00:58,880 --> 00:01:01,840 Speaker 1: the negative, and we've got a couple of interesting guests today, 17 00:01:02,400 --> 00:01:07,399 Speaker 1: the Vague Ramis Swami and Anson Fraris, who the VIK 18 00:01:07,680 --> 00:01:09,600 Speaker 1: has written a book called Woke Inc. That came out 19 00:01:09,680 --> 00:01:12,480 Speaker 1: last year. But the two of them have a new 20 00:01:13,000 --> 00:01:16,080 Speaker 1: uh financial company called Strive that's coming out. How did 21 00:01:16,080 --> 00:01:19,680 Speaker 1: you find out about them? Yeah, just through some people 22 00:01:19,720 --> 00:01:22,440 Speaker 1: in the industry. I've got a conversation UM with the 23 00:01:22,560 --> 00:01:25,920 Speaker 1: VEC and um, this is a fascinating situation. This is 24 00:01:26,000 --> 00:01:29,600 Speaker 1: a part of how I think the stock market and 25 00:01:29,680 --> 00:01:32,200 Speaker 1: companies have become sort of a battleground for the cultural wars. 26 00:01:32,600 --> 00:01:35,440 Speaker 1: And as you know, I my whole thing about E 27 00:01:35,640 --> 00:01:39,640 Speaker 1: s G is not so much the virtue signaling, although 28 00:01:39,640 --> 00:01:42,160 Speaker 1: there's a lot there, but more just I don't want 29 00:01:42,160 --> 00:01:45,360 Speaker 1: investors to have a nasty surprise. Um. We all, that's 30 00:01:45,400 --> 00:01:48,480 Speaker 1: our whole mission is just to avoid investors buying something 31 00:01:48,480 --> 00:01:50,560 Speaker 1: they don't realize they're buying. And I think this year 32 00:01:50,560 --> 00:01:53,040 Speaker 1: we saw E s G. Clearly people are now seeing 33 00:01:53,040 --> 00:01:56,440 Speaker 1: that it's overweight tech and underweight oil and it's underperforming. 34 00:01:56,440 --> 00:01:59,000 Speaker 1: And that was That's been my main mission overall. Although 35 00:01:59,000 --> 00:02:00,560 Speaker 1: I think in E s G s k is it 36 00:02:00,640 --> 00:02:03,160 Speaker 1: becomes weird when you put your values into the stock 37 00:02:03,200 --> 00:02:05,240 Speaker 1: market and everybody's values are different, So how do you 38 00:02:05,480 --> 00:02:09,840 Speaker 1: standardize that. It's just a it's a really complicated space 39 00:02:09,880 --> 00:02:12,840 Speaker 1: full of inconsistencies. But then on the other side you've 40 00:02:12,880 --> 00:02:15,480 Speaker 1: got black Rock and Vanguard now have seven percent ownership 41 00:02:16,000 --> 00:02:18,960 Speaker 1: of the stock market, of all stocks, they have a 42 00:02:18,960 --> 00:02:22,160 Speaker 1: lot of power concentrated in a small number of people. 43 00:02:22,200 --> 00:02:25,400 Speaker 1: And Elon Musk was just on Twitter talking about this. 44 00:02:25,680 --> 00:02:27,280 Speaker 1: I'm gonna go into the details. He got a few 45 00:02:27,280 --> 00:02:29,160 Speaker 1: things wrong, but one thing he did say, and I 46 00:02:29,160 --> 00:02:31,600 Speaker 1: think he's right, is you know, have somebody like Larry 47 00:02:31,600 --> 00:02:34,919 Speaker 1: Fink who probably owns point o one percent of all 48 00:02:34,919 --> 00:02:37,280 Speaker 1: these stocks, yet he has voting power that is seven 49 00:02:37,320 --> 00:02:41,320 Speaker 1: percent um, And so how much power are we going 50 00:02:41,360 --> 00:02:45,200 Speaker 1: to put. It's concentrated into certain people. And because they've 51 00:02:45,240 --> 00:02:46,799 Speaker 1: come out a little bit on the E. S. G 52 00:02:46,960 --> 00:02:50,320 Speaker 1: front um, there's been a little bit of a pushback, 53 00:02:50,600 --> 00:02:53,040 Speaker 1: and today we're we're going to talk to somebody who 54 00:02:53,080 --> 00:02:59,120 Speaker 1: has a plan to push back, this time on brilliants 55 00:02:59,520 --> 00:03:06,120 Speaker 1: but g backlash the vic ants and woke neutrillians. Thank you, 56 00:03:06,240 --> 00:03:10,680 Speaker 1: Thanks guys. Okay, can you explain what you're up to 57 00:03:10,880 --> 00:03:13,920 Speaker 1: because this is gonna be kind of a surprise for 58 00:03:13,919 --> 00:03:15,920 Speaker 1: a lot of people that you want to take on 59 00:03:16,000 --> 00:03:19,840 Speaker 1: black rock. Yeah. So, so thanks for the opportunity. And 60 00:03:20,040 --> 00:03:22,480 Speaker 1: this is the beginning of a long journey. We see 61 00:03:22,480 --> 00:03:26,280 Speaker 1: that eyes wide open. We're addressing what I see as 62 00:03:26,320 --> 00:03:30,680 Speaker 1: a fiduciary breach in the asset management industry where the 63 00:03:30,680 --> 00:03:33,480 Speaker 1: three largest asset managers in the world, and it's Black Rock, 64 00:03:33,560 --> 00:03:36,520 Speaker 1: but it's State Street in Vanguard too. What they're doing 65 00:03:36,560 --> 00:03:40,880 Speaker 1: today is they're using the money of everyday citizens of 66 00:03:40,920 --> 00:03:45,960 Speaker 1: their clients to advocate for policies in corporate America that 67 00:03:46,200 --> 00:03:50,320 Speaker 1: most of their clients disapprove of. That is a fiduciary breach. 68 00:03:50,800 --> 00:03:54,000 Speaker 1: It is not representing the best interests of their clients. 69 00:03:54,320 --> 00:03:57,200 Speaker 1: And it's happening on a systematic scale. Where here's the problem. 70 00:03:57,200 --> 00:04:00,240 Speaker 1: It's not happening at a small scale. These largest terms 71 00:04:00,320 --> 00:04:03,320 Speaker 1: in the world have so much concentrated power that they're 72 00:04:03,320 --> 00:04:07,360 Speaker 1: only representing one viewpoint in the boardroom. That that's also 73 00:04:07,560 --> 00:04:10,400 Speaker 1: verging on what the Arizona Attorney General actually is recently 74 00:04:10,440 --> 00:04:13,760 Speaker 1: called the largest antitrust violation in history. Those were his words. 75 00:04:14,160 --> 00:04:16,080 Speaker 1: Where if you if you run through this thought experiment, 76 00:04:16,160 --> 00:04:20,360 Speaker 1: and you imagine the CEOs of Exxon and Shell and Conical, 77 00:04:20,400 --> 00:04:24,400 Speaker 1: Phillips and Chevron getting together in a room and deciding, 78 00:04:24,440 --> 00:04:27,440 Speaker 1: for example, that they wanted to cut gas production and 79 00:04:27,520 --> 00:04:30,359 Speaker 1: gas prices spike as a result. That would be the 80 00:04:30,360 --> 00:04:33,480 Speaker 1: stuff of movies, right you see handcuffs, you see antitrust violations, 81 00:04:33,520 --> 00:04:37,080 Speaker 1: price fixing allegations. Yet when the largest owners of those 82 00:04:37,120 --> 00:04:40,560 Speaker 1: competing firms effectively mandate them to do the same thing, 83 00:04:41,040 --> 00:04:43,240 Speaker 1: somehow we as a culture have come to celebrate that 84 00:04:43,360 --> 00:04:46,400 Speaker 1: as E S G. And our mission is to restore 85 00:04:46,440 --> 00:04:48,120 Speaker 1: the voice of what we see as the every day 86 00:04:48,160 --> 00:04:50,920 Speaker 1: So it is in the actual client, the firefighter, the nurse, 87 00:04:50,960 --> 00:04:53,160 Speaker 1: the doctor, the business owner whose money Black Rock is 88 00:04:53,200 --> 00:04:55,920 Speaker 1: investing to say that we bring a different message to 89 00:04:55,960 --> 00:04:59,200 Speaker 1: Corporate America's boardrooms that those citizens and those clients actually 90 00:04:59,240 --> 00:05:02,480 Speaker 1: want us to deliver, which is to pursue product excellence 91 00:05:02,839 --> 00:05:06,760 Speaker 1: over politics. That's our message. Okay. So, and the plan 92 00:05:07,120 --> 00:05:10,919 Speaker 1: essentially is to offer sort of replica E T f 93 00:05:11,000 --> 00:05:13,760 Speaker 1: s that would you know, Engine number one is a 94 00:05:13,880 --> 00:05:16,120 Speaker 1: firm that you almost remind me of the inverse of them. 95 00:05:16,400 --> 00:05:19,320 Speaker 1: They're a firm that is small putting out. They have 96 00:05:19,360 --> 00:05:21,920 Speaker 1: a beta product called vote. It's just basically the S 97 00:05:22,000 --> 00:05:24,640 Speaker 1: and P or you know, market beta large cap something 98 00:05:24,680 --> 00:05:27,960 Speaker 1: like that, five basis points. It's basically like I VV, 99 00:05:28,560 --> 00:05:31,160 Speaker 1: except they are going to vote in a very E. 100 00:05:31,400 --> 00:05:33,800 Speaker 1: S G. Activist kind of way. So they're saying put 101 00:05:33,839 --> 00:05:36,080 Speaker 1: your money with us and we'll go do this. You're 102 00:05:36,080 --> 00:05:38,920 Speaker 1: almost the opposite saying we're going to do these replica products, 103 00:05:38,960 --> 00:05:41,120 Speaker 1: but give us your money and we will vote. So 104 00:05:41,160 --> 00:05:44,000 Speaker 1: the companies just act like themselves and will keep all 105 00:05:44,040 --> 00:05:47,680 Speaker 1: the will separate church and state completely. Is that? Do 106 00:05:47,720 --> 00:05:49,279 Speaker 1: I have that right? And you're going to actually have 107 00:05:49,440 --> 00:05:52,120 Speaker 1: a full line of products that are sort of, um, 108 00:05:52,240 --> 00:05:55,840 Speaker 1: very similar to Black Rocks. But promise this new voting 109 00:05:57,240 --> 00:05:58,719 Speaker 1: a way of a way of voting that is a 110 00:05:58,720 --> 00:06:01,400 Speaker 1: little more I guess, um, not anti E s G, 111 00:06:01,520 --> 00:06:04,680 Speaker 1: but just more focused on profits. Yes, So, Eric, what 112 00:06:04,760 --> 00:06:06,800 Speaker 1: We're entering the registration process soon and so I'm not 113 00:06:06,839 --> 00:06:10,680 Speaker 1: going to talk specifically about product about product details here, 114 00:06:10,720 --> 00:06:12,760 Speaker 1: but what I will say is that yes, we will 115 00:06:12,760 --> 00:06:14,719 Speaker 1: be launching E T F S. Yes, as we said 116 00:06:14,720 --> 00:06:16,120 Speaker 1: in the press release, the first one is coming the 117 00:06:16,120 --> 00:06:18,919 Speaker 1: third quarter of the year. But the key hallmark difference 118 00:06:19,000 --> 00:06:22,200 Speaker 1: of our firm and everything that we do well, the 119 00:06:22,279 --> 00:06:26,480 Speaker 1: key differentiator for our mission is bringing a different voice 120 00:06:26,680 --> 00:06:30,560 Speaker 1: and vote to corporate America's boardrooms, bringing a vote, a 121 00:06:30,640 --> 00:06:34,760 Speaker 1: pro excellence voice that is distinguished from the stakeholder capitalism 122 00:06:34,839 --> 00:06:38,200 Speaker 1: voice represented by the Big Three, including Black Rock today, 123 00:06:38,480 --> 00:06:40,520 Speaker 1: and no one is bringing that voice to the table. 124 00:06:40,520 --> 00:06:43,160 Speaker 1: And it's not just focusing on profits, right, That's that's 125 00:06:43,160 --> 00:06:46,479 Speaker 1: a Melton freemnite phrasing of the problem. One of the 126 00:06:46,520 --> 00:06:49,960 Speaker 1: things that I think shareholder capitalism as a philosophy lacked 127 00:06:50,480 --> 00:06:53,559 Speaker 1: was any guidance to companies on how they are actually 128 00:06:53,600 --> 00:06:57,120 Speaker 1: supposed to go about this task of maximizing value for shareholders. 129 00:06:57,400 --> 00:06:59,960 Speaker 1: And so we we phraise it. More precisely, we stand 130 00:07:00,040 --> 00:07:02,880 Speaker 1: for this movement that we call excellence capitalism as a 131 00:07:02,960 --> 00:07:06,440 Speaker 1: counterpart the stakeholder capitalism, where what excellence capitalism says is 132 00:07:06,720 --> 00:07:11,160 Speaker 1: focus exclusively on delivering excellent products and services to your 133 00:07:11,200 --> 00:07:16,280 Speaker 1: customers above all other agendas, including political and social agendas. 134 00:07:16,400 --> 00:07:19,040 Speaker 1: And that's different than stakeholder capitalism, which says you're supposed 135 00:07:19,040 --> 00:07:21,400 Speaker 1: to take into account twelve or twenty stakeholders at the 136 00:07:21,400 --> 00:07:24,160 Speaker 1: same time. Which stakeholders, you might ask, No one knows 137 00:07:24,160 --> 00:07:26,040 Speaker 1: the answer. It seems to be what Larry Fink or 138 00:07:26,080 --> 00:07:28,000 Speaker 1: the CEOs of Van Garden State Street decide on a 139 00:07:28,000 --> 00:07:31,560 Speaker 1: given day. That's the problem we're addressing. Okay, so wait, excellence, 140 00:07:31,800 --> 00:07:34,480 Speaker 1: how do you define excellence? Then? Yeah, and so this 141 00:07:34,520 --> 00:07:36,040 Speaker 1: is gonna be you know, we're gonna have our own 142 00:07:36,160 --> 00:07:39,240 Speaker 1: voting guidelines. We're gonna have our own statement of unpacking 143 00:07:39,240 --> 00:07:41,760 Speaker 1: what excellence capitalism means. Yeah, I could do that here, 144 00:07:41,760 --> 00:07:43,920 Speaker 1: but we could go on for hours. But mission orientation, 145 00:07:43,960 --> 00:07:46,840 Speaker 1: for example, is something that's very high on that list. 146 00:07:47,120 --> 00:07:49,800 Speaker 1: Having a clear mission, staying true to that mission in 147 00:07:49,800 --> 00:07:51,800 Speaker 1: a way that doesn't deviate from that mission. I'll give 148 00:07:51,800 --> 00:07:54,520 Speaker 1: you an example. Excen's mission stated mission I'm gonna get 149 00:07:54,520 --> 00:07:56,160 Speaker 1: this almost right. For the last number of years, for 150 00:07:56,160 --> 00:07:58,280 Speaker 1: the last number of decades, has been to be a 151 00:07:58,320 --> 00:08:01,840 Speaker 1: successful oil and gas company. Black Rock, in their letters 152 00:08:01,920 --> 00:08:05,440 Speaker 1: to Corporate America's CEOs, think about the presumption embedded in this. 153 00:08:05,480 --> 00:08:08,360 Speaker 1: By the way, one asset manager writing an annual letter 154 00:08:08,400 --> 00:08:11,240 Speaker 1: to America's CEO s just that this the hubrist break 155 00:08:11,280 --> 00:08:13,600 Speaker 1: into that as a separate conversation altogether. But in that 156 00:08:13,680 --> 00:08:16,320 Speaker 1: letter he says, pursue your purpose, but in the same 157 00:08:16,400 --> 00:08:18,280 Speaker 1: letter will tell them all of the ways in which 158 00:08:18,280 --> 00:08:20,480 Speaker 1: effectively they need to change their purpose to not be 159 00:08:20,520 --> 00:08:23,160 Speaker 1: an oil and gas company to meet these carbon emation caps, 160 00:08:23,320 --> 00:08:26,240 Speaker 1: to meet the standards of the Sustainability Accounting Standards Board. 161 00:08:26,480 --> 00:08:29,520 Speaker 1: And our message to Exxon will be different if you're 162 00:08:29,560 --> 00:08:32,040 Speaker 1: an oil company, be an excellent oil company. We will 163 00:08:32,040 --> 00:08:33,400 Speaker 1: not tell you not to be an oil company. Be 164 00:08:33,440 --> 00:08:35,480 Speaker 1: an excellent oil company. And guess what. If there's a 165 00:08:35,520 --> 00:08:37,840 Speaker 1: different company that's a solar company, our message to you 166 00:08:37,880 --> 00:08:41,560 Speaker 1: will be equally equally powerful. Be an excellent solar company. 167 00:08:41,559 --> 00:08:43,120 Speaker 1: We will not tell you not to be a solar company, 168 00:08:43,200 --> 00:08:44,840 Speaker 1: but we will not tell oil companies not to be 169 00:08:44,880 --> 00:08:48,079 Speaker 1: oil companies. Disney, let's just take Disney, a company that's 170 00:08:48,080 --> 00:08:49,959 Speaker 1: been in the news recently. I think it bears mentioned. 171 00:08:50,440 --> 00:08:52,400 Speaker 1: It's it's a top of mind for me. Frankly, I 172 00:08:52,440 --> 00:08:54,120 Speaker 1: bring up Disney several times, even in the book that 173 00:08:54,160 --> 00:08:57,120 Speaker 1: I wrote last year. And you know, Disney is a 174 00:08:57,160 --> 00:08:59,440 Speaker 1: company that I think has veered from its mission in 175 00:08:59,440 --> 00:09:01,520 Speaker 1: the near term. It has veered from its mission of 176 00:09:01,559 --> 00:09:04,400 Speaker 1: serving its customers, where it took political stances in recent 177 00:09:04,400 --> 00:09:08,240 Speaker 1: weeks that survey data suggest over sixty percent of its 178 00:09:08,240 --> 00:09:12,040 Speaker 1: customers were alienated by. If we're a shareholder of Disney 179 00:09:12,240 --> 00:09:14,920 Speaker 1: in the future, our message to Bob Chatpick would be 180 00:09:14,960 --> 00:09:18,560 Speaker 1: clear three words, knock it off and focus on serving 181 00:09:18,600 --> 00:09:21,760 Speaker 1: your customers today his top three shareholders, as I understand it, 182 00:09:21,840 --> 00:09:24,480 Speaker 1: or black Rock State Street in Vanguard, they're not delivering 183 00:09:24,480 --> 00:09:27,719 Speaker 1: that message. If anything, if you lead read through their language. 184 00:09:27,840 --> 00:09:30,600 Speaker 1: If anything, they're delivering the opposite message to engage on 185 00:09:30,640 --> 00:09:33,600 Speaker 1: political issues like the contingents ones that he's engaged in. 186 00:09:33,920 --> 00:09:35,520 Speaker 1: So so that gives you some sense of the difference 187 00:09:35,520 --> 00:09:39,880 Speaker 1: of what our pro excellence message stands for. And so, Mum, 188 00:09:40,040 --> 00:09:41,800 Speaker 1: I got a copy of your book late last week. 189 00:09:41,840 --> 00:09:44,520 Speaker 1: I read through some of it. It's a UM, it's 190 00:09:44,600 --> 00:09:47,680 Speaker 1: very well written. Um. And the stuff about you know, 191 00:09:47,720 --> 00:09:50,320 Speaker 1: you're growing up and stuff I think was really interesting. Um. 192 00:09:50,360 --> 00:09:52,319 Speaker 1: Some of the stuff you talk about here does resonate 193 00:09:52,360 --> 00:09:54,640 Speaker 1: with me a little bit. We've had we've had E 194 00:09:54,720 --> 00:09:57,000 Speaker 1: S G Debate podcasts, probably three of them in the 195 00:09:57,000 --> 00:09:59,560 Speaker 1: past couple of years, and sometimes I bring up this 196 00:09:59,600 --> 00:10:02,400 Speaker 1: hipoc or the issue, which is that people will buy 197 00:10:02,400 --> 00:10:05,600 Speaker 1: an E. S G. T F and they won't own 198 00:10:05,800 --> 00:10:08,760 Speaker 1: Amazon and x On. Yet they're going to take five 199 00:10:08,840 --> 00:10:12,120 Speaker 1: vacations that year. Uh, they're gonna still shop at Amazon. 200 00:10:12,679 --> 00:10:18,600 Speaker 1: And this interesting. It's this interesting I guess difference between 201 00:10:18,600 --> 00:10:22,199 Speaker 1: how someone acts in their own life and how they 202 00:10:22,280 --> 00:10:24,560 Speaker 1: sort of present themselves. And I think E. S G. 203 00:10:24,640 --> 00:10:26,960 Speaker 1: T s almost in a way let them off the hook. 204 00:10:27,360 --> 00:10:28,960 Speaker 1: And in your book you talk about how some of 205 00:10:29,000 --> 00:10:32,480 Speaker 1: these CEO s um in the Goldman Sacks and some 206 00:10:32,559 --> 00:10:36,000 Speaker 1: of these big companies, by by taking these virtuous stances, 207 00:10:36,559 --> 00:10:39,200 Speaker 1: they're able to sort of like cover up or keep 208 00:10:39,240 --> 00:10:42,480 Speaker 1: the light off of the things they do that might 209 00:10:42,520 --> 00:10:44,800 Speaker 1: not be be in conflict with that. You bring up 210 00:10:44,840 --> 00:10:47,080 Speaker 1: State Street and the Fearless Girl, which is the statue 211 00:10:47,080 --> 00:10:50,040 Speaker 1: for she and yet they had lawsuits about not paying 212 00:10:50,040 --> 00:10:53,520 Speaker 1: female employees as much, and you go through several examples, 213 00:10:53,559 --> 00:10:55,960 Speaker 1: and that's one of my other problems with E s 214 00:10:56,000 --> 00:10:58,000 Speaker 1: G in general. I feel there and the and the 215 00:10:58,080 --> 00:11:00,800 Speaker 1: virtue virtuousness of some of the eos is there is 216 00:11:01,200 --> 00:11:04,640 Speaker 1: hypocrisy in almost every case UM, and I think that 217 00:11:04,720 --> 00:11:07,880 Speaker 1: does not pass. I think people sense that. UM. On 218 00:11:07,920 --> 00:11:10,560 Speaker 1: the flip side, I think people want companies to to 219 00:11:10,679 --> 00:11:12,840 Speaker 1: do good things too. So I don't know, I just 220 00:11:12,880 --> 00:11:14,160 Speaker 1: want to throw that out there and see what you 221 00:11:14,240 --> 00:11:16,520 Speaker 1: have to say about that. Yeah, I think your spot on. 222 00:11:16,559 --> 00:11:18,040 Speaker 1: And first of all, I want to congratulate you guys 223 00:11:18,040 --> 00:11:20,440 Speaker 1: on actually opening up the E s G debate because 224 00:11:20,440 --> 00:11:21,720 Speaker 1: I think I think that's one of the things that's 225 00:11:21,720 --> 00:11:24,880 Speaker 1: been lacking, is just debate in the public square, small 226 00:11:24,960 --> 00:11:27,600 Speaker 1: personal funny story of mine that might have subconsciously led 227 00:11:27,640 --> 00:11:29,360 Speaker 1: me to this mission. A couple of years ago the 228 00:11:29,400 --> 00:11:31,400 Speaker 1: Manhattan Institute might have been a year and a half ago. 229 00:11:31,559 --> 00:11:34,079 Speaker 1: Manhattan Institute invited Larry Think and I to have an 230 00:11:34,080 --> 00:11:36,760 Speaker 1: open debate on stakeholder capitalism. I tend to think that 231 00:11:36,840 --> 00:11:39,120 Speaker 1: debate is a good thing. Agree or not. Let's get 232 00:11:39,120 --> 00:11:41,000 Speaker 1: the ideas out in the open, and we're a better 233 00:11:41,040 --> 00:11:44,480 Speaker 1: society for it, I accepted, He declined. I think that's 234 00:11:44,480 --> 00:11:46,200 Speaker 1: part of for me, the motivation of putting this to 235 00:11:46,240 --> 00:11:48,760 Speaker 1: the market, to actually let the market decide and let 236 00:11:48,760 --> 00:11:51,520 Speaker 1: the actual participants in that market be able to have 237 00:11:51,600 --> 00:11:54,160 Speaker 1: that debate in the marketplace of ideas. Now to your 238 00:11:54,240 --> 00:11:57,400 Speaker 1: question hypocrisy, I think your spot on, and I think 239 00:11:57,440 --> 00:11:59,200 Speaker 1: one of the things that I would encourage you to 240 00:11:59,240 --> 00:12:01,720 Speaker 1: ask every E s G linked asset manager in the 241 00:12:01,800 --> 00:12:05,680 Speaker 1: US is how they're implementing those same policies, say in 242 00:12:05,800 --> 00:12:09,120 Speaker 1: China or via their Chinese funds. You take the Xon 243 00:12:09,280 --> 00:12:12,000 Speaker 1: example that we talked about before. I am willing to 244 00:12:12,040 --> 00:12:14,800 Speaker 1: wager a bet that most of those projects are proceeding 245 00:12:14,880 --> 00:12:16,880 Speaker 1: the ones that they're talking about dropping off the coast 246 00:12:16,920 --> 00:12:21,679 Speaker 1: of Mozambique or elsewhere, which are expensive, expensive projects, right, 247 00:12:21,720 --> 00:12:24,000 Speaker 1: I mean, like, just to stay with this for a second, 248 00:12:24,040 --> 00:12:27,040 Speaker 1: this idea of excellence, Like you're gonna drop billions of 249 00:12:27,080 --> 00:12:29,440 Speaker 1: dollars on a project that you might not see a 250 00:12:29,440 --> 00:12:32,839 Speaker 1: return on that investment for years and in that time, 251 00:12:32,920 --> 00:12:35,240 Speaker 1: like you know, you mentioned solar before, the cost of 252 00:12:35,280 --> 00:12:37,719 Speaker 1: solar has only come down, Like is that going to 253 00:12:37,800 --> 00:12:40,600 Speaker 1: be the best use of excellence? Yeah? And and by 254 00:12:40,640 --> 00:12:42,920 Speaker 1: the way, if you just take take a look at 255 00:12:42,920 --> 00:12:45,360 Speaker 1: where we are today, if Exon had stuck to its 256 00:12:45,360 --> 00:12:48,200 Speaker 1: plan of increasing oil production, with oil prices being what 257 00:12:48,240 --> 00:12:50,720 Speaker 1: they are, there's no doubt that both x IN and 258 00:12:50,760 --> 00:12:52,840 Speaker 1: the externalities for the U S would have been better off. 259 00:12:53,040 --> 00:12:55,800 Speaker 1: If anything, Russia's collecting higher oil and gas revenue with 260 00:12:55,880 --> 00:12:58,320 Speaker 1: the recent oil and gas spike because of the lack 261 00:12:58,360 --> 00:13:00,600 Speaker 1: of US reliance and the reliance of S companies and 262 00:13:00,640 --> 00:13:02,880 Speaker 1: being able to self sustain on energy production. But the 263 00:13:02,920 --> 00:13:04,600 Speaker 1: point I was gonna bring up in response to Eric's 264 00:13:04,640 --> 00:13:07,200 Speaker 1: remark was, guess who gets to pick up those projects? Now? 265 00:13:07,440 --> 00:13:10,040 Speaker 1: It's firms like petro China, and then guests who also 266 00:13:10,080 --> 00:13:13,080 Speaker 1: owns approximately seven percent of petro China. Some of the 267 00:13:13,120 --> 00:13:15,640 Speaker 1: same E s G kings who are proclaiming that ex 268 00:13:15,640 --> 00:13:17,760 Speaker 1: Son should actually get out of the oil and gas business, 269 00:13:18,000 --> 00:13:21,360 Speaker 1: and so that hypocrisy E s G for the China. 270 00:13:21,440 --> 00:13:24,000 Speaker 1: For me, that's not a hypocrisy that I think we 271 00:13:24,040 --> 00:13:26,520 Speaker 1: can abide. And I think we see that regularly with 272 00:13:26,559 --> 00:13:28,800 Speaker 1: these firms doing what they need to do to be 273 00:13:28,840 --> 00:13:31,960 Speaker 1: able to capture profit for themselves at their parent company 274 00:13:32,000 --> 00:13:34,920 Speaker 1: by expanding into the Chinese market, but leaving even the 275 00:13:35,000 --> 00:13:37,679 Speaker 1: US holders, their clients, of some of their U S 276 00:13:37,720 --> 00:13:40,719 Speaker 1: funds holding the bag as a consequence. And I think 277 00:13:40,760 --> 00:13:44,320 Speaker 1: that those are conflicts of interests that run really, really deep, 278 00:13:44,840 --> 00:13:47,400 Speaker 1: and the hypocrisy is something that it's really worth paying 279 00:13:47,400 --> 00:13:50,160 Speaker 1: attention to here because in many cases, these firms aren't 280 00:13:50,160 --> 00:13:52,600 Speaker 1: even doing what they say they're supposed to do. I 281 00:13:52,600 --> 00:13:55,040 Speaker 1: don't even know what s G means today. Nine weeks ago, 282 00:13:55,160 --> 00:13:58,319 Speaker 1: weapons manufacturers didn't count as E s G. Somebody decided 283 00:13:58,360 --> 00:14:00,360 Speaker 1: nine weeks ago, in the last few weeks that should 284 00:14:00,720 --> 00:14:04,240 Speaker 1: the definition immediately changes. Our main objection is that it 285 00:14:04,280 --> 00:14:08,760 Speaker 1: should not be a concentrated group of monarchs, really European 286 00:14:08,800 --> 00:14:12,880 Speaker 1: style monarchs on American soil deciding what does and doesn't 287 00:14:12,920 --> 00:14:15,839 Speaker 1: count as the moral thing to do. We should sort 288 00:14:15,880 --> 00:14:19,280 Speaker 1: those questions out as citizens through free speech and open debate. 289 00:14:19,520 --> 00:14:22,200 Speaker 1: But if you're using client capital do it you better 290 00:14:22,320 --> 00:14:26,040 Speaker 1: darn well represent the interests of those clients in your 291 00:14:26,040 --> 00:14:29,280 Speaker 1: shareholder advocacy efforts and in your shareholder voting. That's what 292 00:14:29,320 --> 00:14:38,640 Speaker 1: we're setting out to do. Well, you know, you brought 293 00:14:38,720 --> 00:14:42,920 Speaker 1: up the idea of the shareholder capital, the stakeholder capital, 294 00:14:43,080 --> 00:14:46,360 Speaker 1: that being I think that conversation has taken place in 295 00:14:46,360 --> 00:14:49,000 Speaker 1: the public square, and where it landed was, you know 296 00:14:49,080 --> 00:14:55,760 Speaker 1: what we have over indexed on on appeasing shareholders at 297 00:14:55,760 --> 00:14:58,640 Speaker 1: the expense of stakeholders, right, and and that is you know, 298 00:14:58,720 --> 00:15:01,280 Speaker 1: I think E. S. G sort of in the current 299 00:15:01,320 --> 00:15:03,880 Speaker 1: form rose out of this way of like how do 300 00:15:03,960 --> 00:15:07,640 Speaker 1: we attempt to validate some of these other stakeholders? Right? 301 00:15:07,920 --> 00:15:11,200 Speaker 1: So I'm curious, like, in your in your version of 302 00:15:11,280 --> 00:15:17,000 Speaker 1: excellence here, how much stakeholder capitalism do you think is 303 00:15:17,040 --> 00:15:20,320 Speaker 1: appropriate for any business to account for? Because this could 304 00:15:20,320 --> 00:15:23,040 Speaker 1: come at the expensive employees. We're in a tight la 305 00:15:23,320 --> 00:15:26,800 Speaker 1: labor market. We're seeing what how how powerful labor labor 306 00:15:27,120 --> 00:15:29,160 Speaker 1: is all of a sudden, right, Yes, so I think 307 00:15:29,160 --> 00:15:30,880 Speaker 1: you make some valid points. I think that it was 308 00:15:30,880 --> 00:15:33,200 Speaker 1: in the aftermath of the two thousand eight financial crisis, 309 00:15:33,200 --> 00:15:35,480 Speaker 1: and I write about this extensively in the book. It 310 00:15:35,560 --> 00:15:37,400 Speaker 1: was in the aftermath of the eight crisis that there 311 00:15:37,440 --> 00:15:40,960 Speaker 1: was a demand for a new look for American capitalism. E. 312 00:15:41,120 --> 00:15:44,960 Speaker 1: S G and stakeholder capitalism filled that void. However, I 313 00:15:45,000 --> 00:15:47,960 Speaker 1: don't think that debate took place amongst the everyday citizens. 314 00:15:48,000 --> 00:15:50,080 Speaker 1: It took place amongst a handful of c e O 315 00:15:50,160 --> 00:15:53,400 Speaker 1: s and asset managers in cloistered corner offices, some of 316 00:15:53,440 --> 00:15:56,440 Speaker 1: whom approached that in very well intentioned ways. But even 317 00:15:56,480 --> 00:15:59,359 Speaker 1: those well intentioned acts, I think I've had adverse consequences 318 00:15:59,680 --> 00:16:02,760 Speaker 1: by using the actual client capital, the firefighters, the nurses 319 00:16:02,800 --> 00:16:06,360 Speaker 1: of small business owners, as a tool to implement an 320 00:16:06,400 --> 00:16:09,520 Speaker 1: agenda that most of those end users of capital disagree with. 321 00:16:09,800 --> 00:16:12,520 Speaker 1: And that's created a new negative externality as a consequence, 322 00:16:12,600 --> 00:16:16,600 Speaker 1: which is political division, which is rampant institutional mistrust, especially 323 00:16:16,640 --> 00:16:18,280 Speaker 1: when they look at the hypocrisy of some of those 324 00:16:18,320 --> 00:16:20,360 Speaker 1: same actors. And I think that might be one of 325 00:16:20,400 --> 00:16:24,239 Speaker 1: our greatest social crises of all, is that institutional mistrust, 326 00:16:24,600 --> 00:16:28,240 Speaker 1: that political divide, that partisan divide, that we see tearing 327 00:16:28,240 --> 00:16:30,640 Speaker 1: our country apart. That's a big part of what we're 328 00:16:30,680 --> 00:16:32,720 Speaker 1: setting out to fix by now taking this in the 329 00:16:32,720 --> 00:16:35,640 Speaker 1: new decade in a new direction, to de politicize the 330 00:16:35,640 --> 00:16:38,800 Speaker 1: private sector so that it's actually a place where we 331 00:16:38,840 --> 00:16:41,720 Speaker 1: can come together in transacting in that private sector, whether 332 00:16:41,880 --> 00:16:43,800 Speaker 1: or not we're black or white, whether or not we're 333 00:16:43,800 --> 00:16:47,000 Speaker 1: Democrat or Republican, and a political private sector can actually 334 00:16:47,040 --> 00:16:50,840 Speaker 1: solve that problem created by stakeholder capitalism by bringing us 335 00:16:50,840 --> 00:16:54,640 Speaker 1: all together again. And to answer your question very specifically, 336 00:16:55,080 --> 00:16:56,720 Speaker 1: we have a theory of the case here. Okay, I'm 337 00:16:56,760 --> 00:16:58,160 Speaker 1: not saying that this should be the only theory in 338 00:16:58,160 --> 00:17:00,240 Speaker 1: the public square, but this is the theory that we 339 00:17:00,280 --> 00:17:01,880 Speaker 1: believe in and that we want to represent, and we 340 00:17:01,880 --> 00:17:04,040 Speaker 1: think a lot of clients agree with us too. Is 341 00:17:04,119 --> 00:17:06,320 Speaker 1: how do you sort out the debate about who which 342 00:17:06,320 --> 00:17:09,560 Speaker 1: stakeholders interests to prioritize. That's a tough question. I'm empathetic 343 00:17:09,560 --> 00:17:12,160 Speaker 1: to that decision. I've been a CEO before for seven years. 344 00:17:12,840 --> 00:17:14,600 Speaker 1: I understand that that's a tough seat to be in. 345 00:17:14,800 --> 00:17:16,399 Speaker 1: I had to make some of these decisions about what 346 00:17:16,440 --> 00:17:19,320 Speaker 1: I said after the George Floyd incidents back I'm really 347 00:17:19,320 --> 00:17:22,480 Speaker 1: empathetic to how you trade these factors off. Our theory 348 00:17:23,000 --> 00:17:26,199 Speaker 1: at Strive and with our theory of excellence capitalism is 349 00:17:26,240 --> 00:17:29,280 Speaker 1: that the number one stakeholder is the customer, and you 350 00:17:29,359 --> 00:17:32,520 Speaker 1: focus exclusively on delivering excellency in products and services to 351 00:17:32,560 --> 00:17:34,760 Speaker 1: your customer. Now, of course, do you need great employees 352 00:17:34,800 --> 00:17:36,600 Speaker 1: to be able to achieve that goal. Of course you do. 353 00:17:36,720 --> 00:17:39,720 Speaker 1: That goes without saying, but maybe it bears bears mentioned too. 354 00:17:40,000 --> 00:17:42,520 Speaker 1: But that's that's our theory, and we think that's more useful. 355 00:17:42,760 --> 00:17:45,600 Speaker 1: We also think it's more unifying. Unifying companies with their 356 00:17:45,640 --> 00:17:48,000 Speaker 1: customers is also something that actually we think is going 357 00:17:48,040 --> 00:17:50,280 Speaker 1: to do a better job of unifying companies with their 358 00:17:50,320 --> 00:17:52,480 Speaker 1: workers too. I'll tell you one of the things that 359 00:17:52,520 --> 00:17:54,560 Speaker 1: we hear is the workers are demanding. This is something 360 00:17:54,600 --> 00:17:59,120 Speaker 1: that you'll frequently hear from CEOs who make proclamations. The workers, 361 00:17:59,280 --> 00:18:01,679 Speaker 1: like the customers and citizens of this country, are not 362 00:18:01,720 --> 00:18:05,199 Speaker 1: a monolithic body. In fact, they're often very representative of 363 00:18:05,240 --> 00:18:08,159 Speaker 1: their customer base. The workers you hear on social media 364 00:18:08,440 --> 00:18:11,880 Speaker 1: and on Twitter are not necessarily representative of the actual 365 00:18:12,000 --> 00:18:14,879 Speaker 1: true workforce or the actual true customer base. And I 366 00:18:14,920 --> 00:18:17,120 Speaker 1: think that's why when you look at this Twitter disconnect 367 00:18:17,160 --> 00:18:20,400 Speaker 1: between how the Disney issue got adjudicated versus an actual 368 00:18:20,520 --> 00:18:23,840 Speaker 1: survey of Disney's customers. You get the results of where 369 00:18:23,880 --> 00:18:27,119 Speaker 1: most of the citizens, customers, and workers really are. We 370 00:18:27,119 --> 00:18:29,680 Speaker 1: think we're actually gonna be better representing those views through 371 00:18:29,680 --> 00:18:32,840 Speaker 1: our mission at Strive. Yeah, it's interesting. So we actually 372 00:18:32,880 --> 00:18:35,760 Speaker 1: had a note saying that, um, we encourage Vanguard and 373 00:18:35,760 --> 00:18:37,920 Speaker 1: black Rock to democratize the voting. We had a note 374 00:18:37,960 --> 00:18:41,560 Speaker 1: that said, not all your investors live in Williamsburg, UM. 375 00:18:41,640 --> 00:18:44,399 Speaker 1: And this because the loudest voices in E. S G 376 00:18:44,520 --> 00:18:47,280 Speaker 1: and the media are in New York City and they 377 00:18:47,480 --> 00:18:51,520 Speaker 1: tend to think similarly. And that's fine, but there this 378 00:18:51,560 --> 00:18:53,919 Speaker 1: is a company that has investors all over the country. 379 00:18:53,920 --> 00:18:56,080 Speaker 1: So we showed this huge map and they have thirty 380 00:18:56,080 --> 00:18:59,760 Speaker 1: million investors. I think at least Vanguard does, UM and 381 00:19:00,040 --> 00:19:02,240 Speaker 1: there's so I want to get your take on two things. 382 00:19:02,280 --> 00:19:05,199 Speaker 1: One is just this idea of instead of doing what 383 00:19:05,240 --> 00:19:08,520 Speaker 1: you're doing, what about if they were to somehow democratize 384 00:19:08,560 --> 00:19:10,959 Speaker 1: the voting process. Now a lot of the votes are 385 00:19:10,960 --> 00:19:14,520 Speaker 1: boring and administrative and people could care less, but maybe 386 00:19:14,560 --> 00:19:17,520 Speaker 1: they pull the investors to find out where their heads 387 00:19:17,520 --> 00:19:20,400 Speaker 1: are at you know, just capital uh, which is Paul 388 00:19:20,400 --> 00:19:23,600 Speaker 1: Tutor Jones company did this and the polling brings up 389 00:19:23,640 --> 00:19:28,160 Speaker 1: some interesting things. It puts UM worker pay number one. Basically, 390 00:19:28,200 --> 00:19:31,560 Speaker 1: all the top things are, hey, CEO should get paid less, 391 00:19:31,560 --> 00:19:34,320 Speaker 1: workers should get paid more. Then like number five or 392 00:19:34,359 --> 00:19:37,720 Speaker 1: six is climate change stuff. And I guess I would 393 00:19:38,000 --> 00:19:40,840 Speaker 1: be curious if your take on UM just what if 394 00:19:40,840 --> 00:19:43,959 Speaker 1: these companies tomorrow said we're gonna pull and we're going 395 00:19:44,000 --> 00:19:46,240 Speaker 1: to get the consciousness of our base and we're gonna 396 00:19:46,280 --> 00:19:48,720 Speaker 1: vote accordingly. Would you like shut down immediately or you 397 00:19:48,760 --> 00:19:51,040 Speaker 1: think that that wouldn't solve the problem? Well, look, I 398 00:19:51,040 --> 00:19:53,240 Speaker 1: think that would be forward progress and I would applaud 399 00:19:53,280 --> 00:19:56,520 Speaker 1: it if it happened. I think that voting and focusing 400 00:19:56,520 --> 00:19:59,560 Speaker 1: on the shareholder vote alone, though, is in some ways 401 00:19:59,680 --> 00:20:02,520 Speaker 1: a fall slightening rod because most of the change that 402 00:20:02,600 --> 00:20:05,840 Speaker 1: these firms are driving are not through proposals that necessarily 403 00:20:05,880 --> 00:20:08,520 Speaker 1: make it to the ballot. It's through soft influence. It's 404 00:20:08,520 --> 00:20:10,600 Speaker 1: what the corporate governance firms of these big three firms 405 00:20:10,640 --> 00:20:13,520 Speaker 1: call engagement. That's the new word of the day, and 406 00:20:13,760 --> 00:20:15,600 Speaker 1: I think that it's the combination of why we talk 407 00:20:15,640 --> 00:20:18,240 Speaker 1: about a voice and a vote. Here's the other thing 408 00:20:18,240 --> 00:20:20,880 Speaker 1: about shareholder voting is one of the solutions that I contemplated, 409 00:20:20,880 --> 00:20:22,640 Speaker 1: and I've been on this journey for two years really 410 00:20:22,640 --> 00:20:24,639 Speaker 1: thinking about the right way to solve this problem. Was 411 00:20:24,640 --> 00:20:27,200 Speaker 1: it to advocate for giving the vote to every shareholder. 412 00:20:27,200 --> 00:20:30,120 Speaker 1: That sounds elegant. The reality I found is that it's 413 00:20:30,240 --> 00:20:32,960 Speaker 1: it's it's harder than it sounds, and it's less desirable 414 00:20:33,000 --> 00:20:35,840 Speaker 1: than it sounds, because there could be tens of thousands 415 00:20:35,880 --> 00:20:38,320 Speaker 1: of votes that a shareholder, an individual is burdened with 416 00:20:38,359 --> 00:20:41,040 Speaker 1: over the course of years of holding a broad portfolio 417 00:20:41,080 --> 00:20:43,640 Speaker 1: of et f and index funds and securities that they're 418 00:20:43,640 --> 00:20:44,920 Speaker 1: just not going to be equipped to be able to 419 00:20:45,000 --> 00:20:47,280 Speaker 1: vote on well. I then came to the conclusions the 420 00:20:47,359 --> 00:20:49,520 Speaker 1: right solution, and that's what we've set out on here 421 00:20:49,560 --> 00:20:52,000 Speaker 1: and strive to bring to the table, is competition in 422 00:20:52,040 --> 00:20:54,840 Speaker 1: the marketplace of ideas. And so the structural change that 423 00:20:54,880 --> 00:20:56,560 Speaker 1: I think we're gonna see and we should see in 424 00:20:56,560 --> 00:20:59,760 Speaker 1: the asset management industry is a slightly different one. It's 425 00:20:59,800 --> 00:21:03,960 Speaker 1: one were investment advisors and other fiduciaries in the middle, 426 00:21:04,000 --> 00:21:07,439 Speaker 1: the intermediaries like state treasurers, like pension fund boards that 427 00:21:07,520 --> 00:21:10,040 Speaker 1: look at capital allocation, and they look at attributes like 428 00:21:10,160 --> 00:21:13,879 Speaker 1: risk and diversification and sector exposure. They're going to have 429 00:21:13,960 --> 00:21:18,040 Speaker 1: to add voting exposure and advocacy exposure too, and make 430 00:21:18,080 --> 00:21:22,320 Speaker 1: sure that their clients and constituents views and the true 431 00:21:22,320 --> 00:21:25,520 Speaker 1: diversity of those views are represented in the true diversity 432 00:21:25,560 --> 00:21:29,359 Speaker 1: and diversification of that capital allocation too. And black Bart, 433 00:21:29,359 --> 00:21:31,199 Speaker 1: black Rock, and Vanguard, let's say they did go to 434 00:21:31,200 --> 00:21:33,159 Speaker 1: serving their clients, they have to keep in mind the 435 00:21:33,240 --> 00:21:36,240 Speaker 1: clients are not the pension fund necessarily, they're the next client. 436 00:21:36,520 --> 00:21:38,960 Speaker 1: We view the client as the ultimate client, the citizen 437 00:21:39,440 --> 00:21:43,119 Speaker 1: of the fiduciaries as intermediaries in that chain too, And 438 00:21:43,160 --> 00:21:46,159 Speaker 1: so in some ways our critique here is not just 439 00:21:46,280 --> 00:21:49,760 Speaker 1: directed or even principally directed at black Rocker Vangard, State Street, 440 00:21:50,040 --> 00:21:53,920 Speaker 1: but to a system that allocates their client's capital to 441 00:21:54,160 --> 00:21:57,119 Speaker 1: firms that are known to advocate in ways that the 442 00:21:57,280 --> 00:22:01,520 Speaker 1: end user client absolutely disagrees with in most cases. So 443 00:22:02,000 --> 00:22:03,879 Speaker 1: our focus is on how do we restore the voice 444 00:22:03,920 --> 00:22:06,760 Speaker 1: of that end user client, not just the quote unquote 445 00:22:06,760 --> 00:22:09,360 Speaker 1: clients who are intermediaries in that system. And we think 446 00:22:09,359 --> 00:22:11,159 Speaker 1: that this is going to be a structural change. We 447 00:22:11,200 --> 00:22:14,960 Speaker 1: see in asset management where acid allocators registered investment advisors 448 00:22:14,960 --> 00:22:19,040 Speaker 1: across the country. Pension fund board members, state treasurers are 449 00:22:19,040 --> 00:22:21,760 Speaker 1: going to have to start thinking about not just risk 450 00:22:21,800 --> 00:22:25,760 Speaker 1: and diversification and sector exposure, but voting an advocacy exposure 451 00:22:25,800 --> 00:22:28,679 Speaker 1: to representing the true diversity of the underlying views of 452 00:22:28,680 --> 00:22:32,560 Speaker 1: the constituents capital that they represent. Okay, I think I 453 00:22:32,600 --> 00:22:35,960 Speaker 1: have an understanding of how the vague plays into strives 454 00:22:36,000 --> 00:22:39,840 Speaker 1: business plan, But Anson, what do you do? Yes to myself. 455 00:22:39,880 --> 00:22:41,760 Speaker 1: So so it's a quick background vivicul I. We've known 456 00:22:41,800 --> 00:22:43,280 Speaker 1: each other since high school, which is great, and we 457 00:22:43,280 --> 00:22:46,000 Speaker 1: had very similar backgrounds by backgrounds in private equity at 458 00:22:46,000 --> 00:22:47,119 Speaker 1: a school for a couple of years and to the 459 00:22:47,200 --> 00:22:49,440 Speaker 1: last eleven years Mark at Anahzzar Bush. And one of 460 00:22:49,480 --> 00:22:51,240 Speaker 1: the things that really drew me to come back to 461 00:22:51,640 --> 00:22:53,639 Speaker 1: work with him is I had the absolute privilege and 462 00:22:53,640 --> 00:22:56,280 Speaker 1: honor of selling some of the most iconic American brands 463 00:22:56,280 --> 00:22:58,360 Speaker 1: that were out there, things like bud Wise, which sold 464 00:22:58,359 --> 00:23:01,040 Speaker 1: the American dream really in a bottle, things like Nikoloboltrup 465 00:23:01,240 --> 00:23:03,480 Speaker 1: which this work hard, play hard type of brand. We 466 00:23:03,560 --> 00:23:05,679 Speaker 1: had a lot of craft brewers that's really the entrepreneur 467 00:23:05,760 --> 00:23:07,960 Speaker 1: spirit of America, and I was really excited about taking 468 00:23:08,000 --> 00:23:10,680 Speaker 1: that message to a broader audience and to more to 469 00:23:10,800 --> 00:23:13,000 Speaker 1: more companies that frankly had maybe lost the way a 470 00:23:13,040 --> 00:23:15,320 Speaker 1: little bit in terms of using their brands to advance 471 00:23:15,359 --> 00:23:18,000 Speaker 1: through the universal type of principles. So for VIC and myself, 472 00:23:18,080 --> 00:23:19,359 Speaker 1: Vivic is going to be doing a lot of the 473 00:23:19,359 --> 00:23:21,919 Speaker 1: thought leadership, and for myself, I'm building the team kind 474 00:23:21,960 --> 00:23:23,360 Speaker 1: of on the day to day basis. So right now, 475 00:23:23,359 --> 00:23:25,840 Speaker 1: we're based in Columbus, Ohio, we're fast growing, we have 476 00:23:25,880 --> 00:23:28,000 Speaker 1: a lot of people that are very hungry to spread 477 00:23:28,000 --> 00:23:30,239 Speaker 1: this message. But then also we're building the team. So 478 00:23:30,400 --> 00:23:32,239 Speaker 1: it's putting a lot of the processes, putting a lot 479 00:23:32,240 --> 00:23:34,040 Speaker 1: of the right controls, putting on a lot of the 480 00:23:34,080 --> 00:23:36,560 Speaker 1: right compliance, but actually building the company to make sure 481 00:23:36,560 --> 00:23:38,200 Speaker 1: this is a company that's gonna be built to last 482 00:23:38,240 --> 00:23:39,880 Speaker 1: for a hundred years. Because that's really what we're doing, 483 00:23:39,960 --> 00:23:41,680 Speaker 1: to build the foundation and make sure that we're doing 484 00:23:41,680 --> 00:23:43,600 Speaker 1: this the right way. Okay, so you've gotta have money 485 00:23:43,640 --> 00:23:46,160 Speaker 1: to do that. What kind of backing do you have? Yeah, 486 00:23:46,160 --> 00:23:48,840 Speaker 1: So we've started with our seed round of over twenty 487 00:23:48,880 --> 00:23:51,840 Speaker 1: million dollars that included some of the backers that you 488 00:23:51,880 --> 00:23:53,960 Speaker 1: guys are familiar with, that were, by the way, a 489 00:23:53,960 --> 00:23:57,040 Speaker 1: politically diverse base of well known backers. That's just the 490 00:23:57,080 --> 00:24:00,440 Speaker 1: seed round that more than well capitalized us to the 491 00:24:00,480 --> 00:24:03,399 Speaker 1: point of getting to our early product launches. But we 492 00:24:03,480 --> 00:24:05,720 Speaker 1: expect to, you know, build as ants and said, well, 493 00:24:05,760 --> 00:24:07,760 Speaker 1: a company, it's gonna last for a hundred years and 494 00:24:07,760 --> 00:24:09,359 Speaker 1: then some and that's going to be a long journey 495 00:24:09,400 --> 00:24:11,600 Speaker 1: and and and you know, I would not be surprised 496 00:24:11,600 --> 00:24:13,719 Speaker 1: if that takes a lot more capital, a lot more 497 00:24:13,760 --> 00:24:16,480 Speaker 1: human resources, a lot more of every resource along the way. Well, 498 00:24:16,480 --> 00:24:19,760 Speaker 1: you had some big names, Peter Teele, Bill Ackman. How 499 00:24:19,800 --> 00:24:22,480 Speaker 1: did those conversations go? So a lot of these folks 500 00:24:22,480 --> 00:24:25,560 Speaker 1: have become I would say, if not friends, allies in 501 00:24:25,680 --> 00:24:28,800 Speaker 1: thinking about how to revive the soul of both American 502 00:24:28,840 --> 00:24:31,400 Speaker 1: capitalism and democracy. I think a lot of the writing 503 00:24:31,440 --> 00:24:33,000 Speaker 1: I've done in the pages of the Wall Street Journal, 504 00:24:33,000 --> 00:24:37,120 Speaker 1: in my book, etcetera. Started an intellectual current that culminated 505 00:24:37,280 --> 00:24:39,800 Speaker 1: in the creation of this company. One of the things 506 00:24:39,880 --> 00:24:43,399 Speaker 1: I'm proud of is how ideologically diverse, from in the 507 00:24:43,440 --> 00:24:47,240 Speaker 1: partisan sentence, at least ideologically diverse, our base of backers 508 00:24:47,280 --> 00:24:49,360 Speaker 1: is they're all unified in our mission. There's no diversity 509 00:24:49,359 --> 00:24:51,400 Speaker 1: on that, but there's a lot of diversity on whether 510 00:24:51,400 --> 00:24:53,879 Speaker 1: you identify as a Democratic, Republican or none of the above. 511 00:24:54,240 --> 00:24:55,439 Speaker 1: And by the way, the same thing goes for our 512 00:24:55,480 --> 00:24:57,720 Speaker 1: employee base too. That's something I'm proud of too. Is 513 00:24:58,400 --> 00:25:02,000 Speaker 1: our mission to restore a pro excellence voice in corporate 514 00:25:02,000 --> 00:25:05,120 Speaker 1: America and to better represent the citizens of this country 515 00:25:05,600 --> 00:25:09,520 Speaker 1: is something that rises above the otherwise partisan divides and currents. 516 00:25:09,560 --> 00:25:11,680 Speaker 1: And you know, we were I was very important to 517 00:25:11,680 --> 00:25:13,600 Speaker 1: me see that reflected in our investor base. It's very 518 00:25:13,600 --> 00:25:15,640 Speaker 1: important for me to see that reflected in our employee base. 519 00:25:16,200 --> 00:25:18,560 Speaker 1: True diversity is a big part of our mission, bringing 520 00:25:18,560 --> 00:25:20,879 Speaker 1: a true diversity of voices back to the table. And 521 00:25:20,920 --> 00:25:22,520 Speaker 1: so yeah, there are some big names there, but more 522 00:25:22,520 --> 00:25:24,399 Speaker 1: important than the big names to me is also the 523 00:25:24,400 --> 00:25:27,200 Speaker 1: thoughtfulness and even the diversity of perspectives that they bring 524 00:25:27,240 --> 00:25:35,840 Speaker 1: to this mission. Here's two things I think you're up against. 525 00:25:36,160 --> 00:25:39,440 Speaker 1: Number one is apathy. I just wrote a book um 526 00:25:39,600 --> 00:25:42,920 Speaker 1: about a lot of vanguard basically, and one section looks 527 00:25:42,960 --> 00:25:46,640 Speaker 1: at voting and a lot of the advisers I I interviewed, 528 00:25:46,720 --> 00:25:48,760 Speaker 1: they said, you know, none of my clients care how 529 00:25:48,880 --> 00:25:52,160 Speaker 1: vanguard votes and I don't even care. And I found 530 00:25:52,200 --> 00:25:55,560 Speaker 1: that there was largely apathy. Not everybody, but the majority 531 00:25:55,600 --> 00:25:58,359 Speaker 1: were apathetic, but they just wanted low fees and you know, 532 00:25:58,400 --> 00:26:02,080 Speaker 1: returns to the market. That's one. Number Two. Black Rock 533 00:26:02,119 --> 00:26:05,720 Speaker 1: has some of the most liquid, low cost famous popular 534 00:26:05,800 --> 00:26:08,760 Speaker 1: e t f s and an army of wholesalers. Um, 535 00:26:08,800 --> 00:26:11,479 Speaker 1: you know, Europe against apathy and black Rock, which are 536 00:26:11,480 --> 00:26:14,639 Speaker 1: two massive hurdles. And what's your plan to sort of 537 00:26:14,800 --> 00:26:18,720 Speaker 1: break through and try to get through that with this message? Yeah? 538 00:26:18,760 --> 00:26:21,479 Speaker 1: So I agree with you on the second. The second 539 00:26:21,640 --> 00:26:24,520 Speaker 1: is a tall mountain to climb. I disagree with you 540 00:26:24,560 --> 00:26:26,960 Speaker 1: respectfully on the first. And I think that, yes, I 541 00:26:26,960 --> 00:26:29,639 Speaker 1: think there's a history of apathy with respect to shareholder 542 00:26:29,720 --> 00:26:33,159 Speaker 1: voting of end user clients. I think something changed in 543 00:26:33,160 --> 00:26:35,679 Speaker 1: the last five years. Right when black Rock achieved the 544 00:26:35,720 --> 00:26:38,439 Speaker 1: scale that it did, it only started weighing in on 545 00:26:38,560 --> 00:26:41,280 Speaker 1: the E and the S as opposed to the G. 546 00:26:41,760 --> 00:26:44,760 Speaker 1: The G is classical shareold rewarding, staggered board stuff. You're right, 547 00:26:44,800 --> 00:26:47,800 Speaker 1: everyday citizens could care less, even many registered investment advisors 548 00:26:48,000 --> 00:26:51,040 Speaker 1: could care less. But in the last five years something 549 00:26:51,080 --> 00:26:55,040 Speaker 1: has changed, and the votes that they're casting on these 550 00:26:55,160 --> 00:26:59,000 Speaker 1: environmental and so called social issues are actually at odds 551 00:26:59,080 --> 00:27:01,120 Speaker 1: with their end user clients in a way that look. 552 00:27:01,200 --> 00:27:03,320 Speaker 1: I've traveled the country over the last couple of years. 553 00:27:03,680 --> 00:27:07,919 Speaker 1: I have been shocked. I've been overwhelmed by how moved 554 00:27:08,000 --> 00:27:11,440 Speaker 1: people are by the idea that their voice isn't represented, 555 00:27:11,520 --> 00:27:14,639 Speaker 1: especially when you're using their money to do it. I 556 00:27:14,640 --> 00:27:16,280 Speaker 1: will tell you, in the last forty eight hours, I 557 00:27:16,320 --> 00:27:18,840 Speaker 1: have been overwhelmed by the flood. And it it has been 558 00:27:18,840 --> 00:27:21,040 Speaker 1: nothing sort of a flood we've received since the Walster 559 00:27:21,160 --> 00:27:23,080 Speaker 1: Journal first broke the story. It was a little earlier 560 00:27:23,119 --> 00:27:26,200 Speaker 1: than we expected that they broke the story. We I mean, 561 00:27:26,240 --> 00:27:29,160 Speaker 1: including people from black Rock, from Vanguard, from State Street, 562 00:27:29,160 --> 00:27:31,320 Speaker 1: from the world's largest asset managers telling us these are 563 00:27:31,359 --> 00:27:33,760 Speaker 1: their words, not mine. They're fed up with the nonsense. 564 00:27:34,400 --> 00:27:36,680 Speaker 1: I didn't expect to see that from the employee base. 565 00:27:36,760 --> 00:27:39,240 Speaker 1: I expected to see it from the eventual end client base. 566 00:27:39,720 --> 00:27:41,920 Speaker 1: I think that we are on a cultural tidal wave 567 00:27:41,920 --> 00:27:43,280 Speaker 1: where I think I think, if you think about talking 568 00:27:43,280 --> 00:27:45,520 Speaker 1: about every day Americans across this country, you don't mess 569 00:27:45,560 --> 00:27:47,800 Speaker 1: with two things. That that better, there's you don't mess 570 00:27:47,800 --> 00:27:49,560 Speaker 1: with their kids. You saw a lot about that last 571 00:27:49,640 --> 00:27:51,000 Speaker 1: year and what played out in the school boards in 572 00:27:51,000 --> 00:27:52,720 Speaker 1: this country. But the thing is, you don't mess with 573 00:27:52,720 --> 00:27:54,840 Speaker 1: their money, and you don't mess with their money to 574 00:27:54,960 --> 00:27:57,960 Speaker 1: weaponize back against them. The things that they're donating to, 575 00:27:58,040 --> 00:28:01,280 Speaker 1: the organizations they're volunteering for, the place, the ways they're 576 00:28:01,320 --> 00:28:05,439 Speaker 1: raising their children. You don't use their own money to 577 00:28:05,640 --> 00:28:09,000 Speaker 1: implement policies through the back door, using corporate voting or 578 00:28:09,000 --> 00:28:11,240 Speaker 1: corporate advocacy to do it. Once they wake up to 579 00:28:11,280 --> 00:28:13,600 Speaker 1: that fact, this is a genie that you will not 580 00:28:13,640 --> 00:28:15,320 Speaker 1: be able to put no one will be able to 581 00:28:15,359 --> 00:28:17,920 Speaker 1: put back in the bottle. And your question of how 582 00:28:17,960 --> 00:28:20,320 Speaker 1: we're going to be able to compete, look, there's a 583 00:28:20,520 --> 00:28:23,520 Speaker 1: vestiges of lobbying that favor the incumbent. Black Rock and 584 00:28:23,560 --> 00:28:26,840 Speaker 1: other firms have been masterful at lobbying, at carving distribution channels, 585 00:28:26,840 --> 00:28:30,040 Speaker 1: at being exclusionary in their business practices. As I said earlier, 586 00:28:30,080 --> 00:28:32,440 Speaker 1: a lot of even Arizona attorney generals talked about antitrust 587 00:28:32,480 --> 00:28:35,199 Speaker 1: violations for these large e SG link managers. But the 588 00:28:35,280 --> 00:28:38,320 Speaker 1: one thing we have going for us is the desire 589 00:28:38,480 --> 00:28:41,320 Speaker 1: of the everyday citizen to be heard and to make 590 00:28:41,360 --> 00:28:43,920 Speaker 1: sure that their capital is not weaponized back against the 591 00:28:44,000 --> 00:28:46,480 Speaker 1: values that they hold most dear in their heart. And 592 00:28:46,520 --> 00:28:48,400 Speaker 1: I think that's going to be the competitive advantage that 593 00:28:48,440 --> 00:28:51,000 Speaker 1: matters most in the end. And if we're doing our 594 00:28:51,080 --> 00:28:53,920 Speaker 1: jobs right, we're fixing a lot of those structural obstacles 595 00:28:53,960 --> 00:28:56,320 Speaker 1: along the way. And if we fail to do that, 596 00:28:56,520 --> 00:28:58,160 Speaker 1: it's not going to be for because of the failure 597 00:28:58,200 --> 00:28:59,920 Speaker 1: of the demand. It's's going to be because we fail 598 00:29:00,320 --> 00:29:03,800 Speaker 1: to do our job in fixing a broken system. That's 599 00:29:03,840 --> 00:29:06,200 Speaker 1: the job we're taken on its strive. But the everyday 600 00:29:06,280 --> 00:29:10,120 Speaker 1: citizens voice is every there, every bit there. There's a 601 00:29:10,200 --> 00:29:12,400 Speaker 1: damn waiting to break for them to actually be heard 602 00:29:12,440 --> 00:29:16,040 Speaker 1: in our economy and our corporate boardrooms. Again. Wow, yeah, 603 00:29:16,080 --> 00:29:18,440 Speaker 1: I mean it's really if I've been covering ets for 604 00:29:18,760 --> 00:29:22,120 Speaker 1: fifteen nearly twenty years, and I remember when everything was like, 605 00:29:22,120 --> 00:29:24,200 Speaker 1: oh whichevery e t F is cheaper, I'll pick that, 606 00:29:24,240 --> 00:29:26,400 Speaker 1: it'd be It's gonna be interesting to see if now 607 00:29:26,680 --> 00:29:28,920 Speaker 1: e t F s are now picked, because the cost 608 00:29:28,960 --> 00:29:31,120 Speaker 1: will be all else equel, the holdings all else equel, 609 00:29:31,480 --> 00:29:33,880 Speaker 1: which is how they vote. Um, it's going to be 610 00:29:33,920 --> 00:29:36,200 Speaker 1: fascinating to watch. This is a droll This is going 611 00:29:36,240 --> 00:29:40,960 Speaker 1: to be uh, one really interesting experiment to see play out. Yeah, 612 00:29:41,040 --> 00:29:42,760 Speaker 1: and so just to bring him back to E t 613 00:29:42,920 --> 00:29:44,800 Speaker 1: F S, what are we gonna expect to see from you? 614 00:29:45,600 --> 00:29:47,000 Speaker 1: So so at a high level, what you said is 615 00:29:47,000 --> 00:29:49,280 Speaker 1: our our products are launching in the third quarter of 616 00:29:49,280 --> 00:29:52,080 Speaker 1: the year as a firm, and we'll say more about 617 00:29:52,120 --> 00:29:54,520 Speaker 1: that at the right point in time. That as a firm, 618 00:29:54,800 --> 00:29:58,160 Speaker 1: our mission is about restoring that everyday voice of the 619 00:29:58,200 --> 00:30:01,040 Speaker 1: citizen in the boardroom, and we're gonna be launching this 620 00:30:01,440 --> 00:30:04,280 Speaker 1: as a movement. Think about this as as movement marketing, 621 00:30:04,440 --> 00:30:07,480 Speaker 1: not E T F marketing. Okay, the movement we're marketing 622 00:30:07,960 --> 00:30:11,520 Speaker 1: is excellence capitalism in the American economy. This new idea 623 00:30:11,600 --> 00:30:14,760 Speaker 1: that the stakeholder you put first is the customer, and 624 00:30:14,800 --> 00:30:17,440 Speaker 1: it is not just the apologetic pursuit of excellence, because 625 00:30:17,440 --> 00:30:19,040 Speaker 1: I think that's a lot of what's behind this three 626 00:30:19,120 --> 00:30:22,320 Speaker 1: letter achronymized capitalism. Pick your three letter acronym of choice. 627 00:30:22,360 --> 00:30:25,000 Speaker 1: It's about apologizing for the pursuit of excellence. The thing 628 00:30:25,000 --> 00:30:29,280 Speaker 1: that's different about Strive is that we strive for excellence unapologetically, 629 00:30:29,480 --> 00:30:32,440 Speaker 1: and we will encourage every major company in America to 630 00:30:32,520 --> 00:30:35,040 Speaker 1: do the same thing. That isn't a company. That is 631 00:30:35,040 --> 00:30:37,520 Speaker 1: a movement, and we're building that movement. And we think 632 00:30:37,560 --> 00:30:39,800 Speaker 1: that not all, but most of the citizens of this 633 00:30:39,800 --> 00:30:41,920 Speaker 1: country are gonna behind us. And I have a message 634 00:30:41,960 --> 00:30:43,840 Speaker 1: for those of us, for those who disagree with us too, 635 00:30:44,160 --> 00:30:46,840 Speaker 1: It's that we respect their decisions to go in a 636 00:30:46,880 --> 00:30:49,200 Speaker 1: different direction. It is okay for someone to say that 637 00:30:49,240 --> 00:30:52,240 Speaker 1: they want to embrace the stakeholder capitalism agenda. There should 638 00:30:52,240 --> 00:30:54,400 Speaker 1: be a choice for everyone. We just think we're building 639 00:30:54,400 --> 00:30:57,080 Speaker 1: a choice that's the right choice for what we believe 640 00:30:57,120 --> 00:30:59,560 Speaker 1: will be most Americans. And as Eric said, it's it's 641 00:30:59,600 --> 00:31:01,720 Speaker 1: it's time will tell as we as we run this 642 00:31:01,760 --> 00:31:05,160 Speaker 1: experiment over the course of the next year. Okay, closing 643 00:31:05,200 --> 00:31:08,080 Speaker 1: question that we always ask on trillions, what's your favorite 644 00:31:08,080 --> 00:31:10,160 Speaker 1: ticker other than your own? You don't have one yet, 645 00:31:10,200 --> 00:31:13,680 Speaker 1: but like, what's your favorite et F ticker? I like, actually, 646 00:31:13,800 --> 00:31:15,880 Speaker 1: you know, I'm gonna give you uh answer here that 647 00:31:15,960 --> 00:31:19,160 Speaker 1: maybe a little surprising. I like the name the O 648 00:31:19,360 --> 00:31:23,240 Speaker 1: T E vote. I think that it stands for something powerful. 649 00:31:23,600 --> 00:31:26,320 Speaker 1: And you know what, we can all agree or disagree 650 00:31:26,440 --> 00:31:29,240 Speaker 1: on underlying merits, but if we can all come back 651 00:31:29,280 --> 00:31:31,840 Speaker 1: together and agree that it's important to represent the views 652 00:31:31,880 --> 00:31:33,880 Speaker 1: of citizens in the boardroom. That's a mission I'm going 653 00:31:33,920 --> 00:31:36,600 Speaker 1: to be behind, not one that I would have expected, 654 00:31:36,760 --> 00:31:40,320 Speaker 1: but also expected expected and on it also at the 655 00:31:40,320 --> 00:31:44,160 Speaker 1: same time, yes, exactly, yes, all right, the veg Anson 656 00:31:44,160 --> 00:31:46,640 Speaker 1: thanks for joining us on Trillions. Thanks guys, thank you, 657 00:31:51,600 --> 00:31:54,320 Speaker 1: thanks for listening to Trillions. Until next time. You can 658 00:31:54,320 --> 00:31:59,320 Speaker 1: find us on the Bloomberg terminal, Bloomberg dot com, Apple Podcast, Spotify, 659 00:31:59,520 --> 00:32:01,760 Speaker 1: and wherever else you'd like to listen. We'd love to 660 00:32:01,760 --> 00:32:05,040 Speaker 1: hear from you. We're on Twitter, I'm at Joel Webber Show. 661 00:32:05,400 --> 00:32:09,880 Speaker 1: He's at Eric Baltunas. This episode of trans was produced 662 00:32:09,880 --> 00:32:13,560 Speaker 1: by Magnus Hendrickson. Frincessica Levy is the head of Bloomberg 663 00:32:13,720 --> 00:32:21,320 Speaker 1: Podcast by h