Speaker 1: These sees Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Stenovic on Bloomberg Radio. All right, everybody, you might remember
Speaker 1: last month that we talked about that viral list that
Speaker 1: turned a Yale professor into an enemy of the Russian state.
Speaker 1: It is true. We're talking about Jeffrey Sonnenfeld, who has
Speaker 1: assigned grades to four companies and in the process highlighted
Speaker 1: the economic cost of sanctions that caught the attention of
Speaker 1: Russian officials put him on the Russian stop list, which
Speaker 1: there's a few other familiar names on that list. Yeah,
Speaker 1: one might say he's in good company. First, Lady Joe
Speaker 1: Biden is on their center. Mitch McConnell, they're both on
Speaker 1: the list as well. We've got just Son and Felt
Speaker 1: with us right now. Senior Associate Dean for Leadership Studies,
Speaker 1: Lester Crown, Professor of Leadership Practice at the Yale School
Speaker 1: of Management. He joins us this afternoon via zoom from Branford, Connecticut.
Speaker 1: Good to have you with us, professor. Good to have
Speaker 1: you back with us. I should say, Happy New Year.
Speaker 1: And you know I'm eager to hear your thoughts on this.
Speaker 1: Ever since the Business Business Week out this story in
Speaker 1: the magazine. I've been curious to you know, and I
Speaker 1: know you spoke to Business Week for it. Um what
Speaker 1: you think now of seeing your name on that list? Well,
Speaker 1: thank you, it's uh and it's good to be back
Speaker 1: with you. Tim and Carla. Thank you so much for
Speaker 1: the invitation, and happy New Year to you as well.
Speaker 1: It's interesting I've gotten a huge amount of feedback because
Speaker 1: everybody reads Bloomberg, Bloomberg, business Week and and and follows Bloomberg.
Speaker 1: Uh so Uh, there's hardly a CEO I know that
Speaker 1: hasn't either sent a note or a call or a
Speaker 1: text message or something that sees it as a tremendous
Speaker 1: badge of honor. And the H that is all of
Speaker 1: them that are on the A, B, and C list,
Speaker 1: the D s in the FS. Actually, i've heard from
Speaker 1: a number that are on the D list. The D
Speaker 1: list are people that they didn't pull out of Russia,
Speaker 1: but they have curtailed some future investing. Uh. The reason
Speaker 1: we came out, by the way, with the A, B, C,
Speaker 1: D and F isn't just because we're a schoolhouse and
Speaker 1: that's all we know how to do. Is that there
Speaker 1: are some very artful public relations smoke screen some been
Speaker 1: that was leading to a lot of atmospherics about people
Speaker 1: who were saying nice things and not doing anything, and
Speaker 1: we thought we should divide out those who who actually
Speaker 1: physically pulled out permanently, who did so temporarily, who partially
Speaker 1: pulled out, who did some atmospherics, and then some who
Speaker 1: aren't doing a darn thing. And that's that's how we
Speaker 1: divided them out into a through A through F. You
Speaker 1: are someone that is a go to voice when it
Speaker 1: comes to leadership and understanding what goes on in C suites,
Speaker 1: and you talk with a lot of leaders, they reach
Speaker 1: out to you as well, Jeff. But I do wonder
Speaker 1: was there something different about the Russian invasion in Ukraine
Speaker 1: that made it easier for companies to come out and
Speaker 1: say we got to pull out of this. You know,
Speaker 1: very good question, Carrol, because of course CEOs are under
Speaker 1: a lot of pressure these days and getting involved and
Speaker 1: using their voice and social issues. If we were having
Speaker 1: this discussion two years ago, there's a stampede of enthusiasm
Speaker 1: for getting involved in voting rights or the presidential succession issues,
Speaker 1: and they've gotten some blowbacks in some states on positions
Speaker 1: on whether or not it's on environmental issues or reproductive
Speaker 1: rights for women. And CEOs have still been using their
Speaker 1: voice on these various issues. However, on this one, there
Speaker 1: is no controversy, none whatsoever. In fact, I just addressed
Speaker 1: the attorneys general of all fifty states with their deputies
Speaker 1: and lieutenants there. Uh, and there was rousing support for
Speaker 1: this move state by state. Uh. And you can actually
Speaker 1: see that doing well is not antithetical to doing good.
Speaker 1: There's no dispute between shareholders and other stakeholders. The more
Speaker 1: dramatically the companies pulled out, and our research shows this,
Speaker 1: the better they were rewarded in their in their financial performance.
Speaker 1: How is this different? Help me out here, though? When
Speaker 1: I think about what happened to Jamal Kasogi in you know,
Speaker 1: the journalist right um, that was killed assassinated? How is
Speaker 1: this different from the mass killings in Syria? How is
Speaker 1: it different that companies can come out and speak out
Speaker 1: against what happened in terms of this Russian war in
Speaker 1: Ukraine versus those? What's different? Uh? Those are you know
Speaker 1: a great example? UM? I was worried after the killing
Speaker 1: of Kashogi. Jamal Kashogi, the Washington Post columnist that was
Speaker 1: I think the US resident at that point working on
Speaker 1: a citizenship that there was condemnation, and there was a
Speaker 1: slight delay, and ultimately there was a mass exodus from
Speaker 1: that Davos in the desert. But Carol, you would say
Speaker 1: a year later they went back. Uh, and some of
Speaker 1: our top officials still went over in some companies. Uh.
Speaker 1: There is mass suffering around the world. We can take
Speaker 1: a look at an awful lot of hotspots where there's
Speaker 1: a tremendous amount of injustice. And the question is, uh,
Speaker 1: it's like a hospital e er right now we have
Speaker 1: here at Yale New Haven Hospital, like around the country,
Speaker 1: we have a rising tide of respiratory viruses. We have
Speaker 1: the flu. We we of course have this new strain
Speaker 1: of covid uh, and we have car accidents. To weather
Speaker 1: here is horrible today. There are a lot of car
Speaker 1: accident and after a while, you know, and you are
Speaker 1: is gonna say, no, we don't want anymore. No, they
Speaker 1: don't do that. They just decide on a triage basis.
Speaker 1: What Some things are worse than other things. The mass
Speaker 1: slaughter of of moms with their babies in their arms,
Speaker 1: lined up for bread. Uh, that's different. Bombing orphanages, bombing hospitals,
Speaker 1: the targeting civilians for this mass carnage, that kind of
Speaker 1: those kind of level of atrocities are are are worse
Speaker 1: than some horrible other types of injustices. But you're right,
Speaker 1: and we need to take moral positions when we can.
Speaker 1: In this case, the operational risk, the financial risk on
Speaker 1: the reputation risk of staying in Russia was so high
Speaker 1: that the companies who have stayed have suffered. And we
Speaker 1: also have very little interest in being involved there. Some
Speaker 1: bring up China, for example, and that's a way more
Speaker 1: complicated because of the intertwined economics. Right now, Russia brings
Speaker 1: I mean, the moral decision is easy because the pragmatics
Speaker 1: are so easy. Russia brings nothing to the global marketplace
Speaker 1: other than food and fuel. So, Jeff, is it then
Speaker 1: a financial decison? It it's it easy financial decision when
Speaker 1: it comes to Russia, but maybe not so much when
Speaker 1: it's Saudi Arabia or China, for instance. Uh, it's it's
Speaker 1: easier when when we take a look at Saudi Arabia,
Speaker 1: what we did see, it's targeted. Uh, some kicking and
Speaker 1: screaming and some enthusiastically, but every major fashion house pulled
Speaker 1: out of the Shinjin province over that really fine cotton.
Speaker 1: Of course that's made there with the alleged uh detainment
Speaker 1: of you know, these awful conditions of the forced labor
Speaker 1: of the weaker minority population. That's pretty horrible. And and
Speaker 1: we've seen every fashion house pull out of there, and
Speaker 1: that's that's really fantastic cotton. And that's that's made a
Speaker 1: big difference. And uh, so we see that there are
Speaker 1: are targeted uh. Uh. You know, people ask, what about
Speaker 1: there's an invasion Taiwan? What about there isn't one yet.
Speaker 1: If there is, we'll see. But right now we we
Speaker 1: we we've seen there is a an invasion of a
Speaker 1: sovereign nation, a democratic sovereign nation, uh and a mass
Speaker 1: slaughter with mass atrocities. That this is in a category
Speaker 1: by itself in the world right now out. But there
Speaker 1: may be other situations that come to come to the
Speaker 1: four where we need to get involved as well. But
Speaker 1: right now, uh, this is the one. If it doesn't
Speaker 1: look like we have fortitude here, there certainly will be others.
Speaker 1: It's important to show that the world united as they are.
Speaker 1: Only forty of these companies have pulled out. That these
Speaker 1: three companies have pulled out. Our American there from every
Speaker 1: part of the world that pulled out. Fantastic, professor. What
Speaker 1: have you heard from the companies that haven't yet pulled
Speaker 1: out yet? And I'm just going through their several versions
Speaker 1: of this list that you can look at on Yale's website,
Speaker 1: uh and then another one Yale Russian Business Retreat dot
Speaker 1: com as well for a sortable version of that list
Speaker 1: if our listeners and viewers want to check that out.
Speaker 1: But some are you know, business as usual, still operating
Speaker 1: in Russia, still selling products to Russia. What have you
Speaker 1: heard from these companies? Well, it's surprising, you know. I've
Speaker 1: been tracking for forty five years now, looking at corporate
Speaker 1: social impact issues with the Business Roundtable, with the founding
Speaker 1: generation of the Business Roundtable, and that old and the
Speaker 1: first movers in this case aren't the usual one. The
Speaker 1: ones who pulled out early were big oil, big tech,
Speaker 1: and professional service firms for various reasons. You can imagine
Speaker 1: that those three clusters are not usually on the front
Speaker 1: lines of social justice issues they were in this case.
Speaker 1: Those who are staying are a weird mix across industries.
Speaker 1: Places like international paper. What what are they doing there?
Speaker 1: Match group here, you give them an F grade match
Speaker 1: dot Com. What in the world did they They're trying
Speaker 1: to bring social harmony in to to the Soviet and
Speaker 1: to Russia right now. I mean, there's some twisted belief
Speaker 1: that some had that these global brands. If you remember
Speaker 1: Tom Friedman in the New York Times, I hope he's
Speaker 1: not your best friend, but one of his most naive
Speaker 1: columns was a column that that was very widely circulated
Speaker 1: a few years ago on the Golden Arches rule of
Speaker 1: diplomacy that any two countries with the McDonald's would never
Speaker 1: go to war with each other. And this led some
Speaker 1: US brands to think that this is a way of
Speaker 1: a refutation of old Soviet repression from celebrating that's that's crazy.
Speaker 1: But no, they shouldn't be there. Benetton shouldn't be there.
Speaker 1: Georgio Armanio is still there. It's Jeff, we gotta run uh.
Speaker 1: And of course that was Jeff's perspective and opinion. Ipertinately,
Speaker 1: when it comes to the New York Times calumnus, this
Speaker 1: is Bloomberg