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Executives in the era of no-holds barred activism

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The purview of corporate senior executives is growing ever wider. Beyond incorporating the new technologies, the individualization of consumer preferences, the pressure of competitors, and the fragility of global supply chains, they must now contend with regulators, non-governmental organizations, and social movements that have adopted an “activist” style. 

We now live in an era where the mobilization of public opinion—through social media, consumer boycotts or street protests—is a weapon used to pressure corporations, and their leaders, to alter their behavior. 

Such behaviour is not new. What’s new is that political parties and even governments are embracing the activist’s rulebook. The current U.S. administration is a case in point, with former activists now occupying official positions within the public bureaucracy and the president applying his executive resources to align firms with his policies.

As a result of this seismic shift, corporate leaders must prepare for an increasingly polarized world where neutrality is often no longer an option, and where the penalties for betting wrong are both economic and personal. 

The first step for managers is to understand the types of activist, their motives, and tactics. Sometimes this comes from a single high-profile individual. Investor Carl Icahn, for instance, attempted to install board members at McDonald’s to change how its suppliers treated pregnant pigs—a cause raised by his daughter, an animal rights advocate. Other activists operate on ideological grounds. Bud Light faced backlash from a substantial part of its traditional customer base after partnering with a transgender influencer, a clash that cost it its market lead. 

Activists can target companies for a variety of reasons. Wealthy private-sector firms are prime targets, as their resources make them inclined to concede to avoid public battles. Companies that champion social responsibility are often targeted for their perceived hypocrisy. Minor discrepancies between their stated values and actual practices can lead to accusations, as Nike experienced regarding alleged sweatshop labour. 

Activists may also target companies that share values with them, as these organizations are more likely to make concessions. Companies can also come under attack for pure political gain, as seen in then Republican candidate Ron DeSantis’s confrontation with Disney over LGBTQ rights. 

Additionally, targeting influential firms can potentially create a ripple effect that impacts the rest of that sector. This is one of US president favourite tactics, applied to to a variety of fields, from the legal sector to high tech. He knows, as sociologists of organizations know, that what corporations and individuals fear most is making mistakes that leave them on their own. Taking risks, or adopting a political stance, is always better when you are in good company. 

Such “groupthink” can explain the plethora of high-tech leaders who attended the inaugration, and joined forces to pledge millions to support P]presidential policies at a recent White House reception. It also explains the stampede by large corporations to water down previously robust DEI commitments to better align with Trump’s anti-woke agenda. 

Despite these shifts, executives are not completely powerless:

  1. Have a team to deal with these situations and ensure that clear protocols are in place so you know what steps to take before you need to take them. 
  2. Don’t leave the management of a reputational conflict to lawyers, or economists. Social and political conflicts are won because of perceived legitimacy—and neither legal or fiscal arguments guarantee that. Harvard’s former president Claudine Gay lost her job after a disastrous appearance at the US Senate when she answered along legal lines, not politically.
  3. Cultivate powerful friends.  Building alliances before a crisis or conflict arises can actually help deter attacks, or ensure that they are deflected to easier targets.
  4. Most conflicts are decided by the tribunal of public opinion. Ensure you have reputation of transparency with journalists. They will end up reporting the truth no matter what but you may gain some time to gather the facts.
  5. Know what the real issue is (often is not what appears to be), the actors that count, what information is relevant and what resources you need. 
  6. Try to co-opt the more moderate activist so that the more extreme find themselves isolated. For example, often corporations hired activists to lead newly created DEI units. However, often many of those quit, feeling it was just a “window dressing” operation.
  7. Never lie. Nestle’s CEO Laurent Freixas was not forthcoming when informing their boards of serious personal faux pas and lost his job. Full transparency is the norm.
  8. Victor Hugo, the author of “Les Misérables”, said that there is nothing as powerful as an idea whose time has come. There are “moments” that are irresistible. We do not know whether Jimmy Kimmel’s late night program was temporarily cancelled out of fear, panic, or as a cautious retreat in a moment of intense emotions, but it illustrates the old adage that “bending is better than breaking”. 

These tactics are meant to focus on a short term response to a specific crises, but that shouldn’t deflect from the point that all firms have a long-term obligation to act ethically and sustainably – and indeed that activism and activists play a vital role in calling out organisations when they fail to do so. Conflicts with social and political activists are often public, dramatic and happen fast. Everything is weaponized and carries with it high corporate and personal reputational stakes. Because these conflicts are so intensely emotional, they often provoke rushed and mistaken reactions. Keeping a cool head is essential. The only way to ensure a measured response and a positive outcome for you and your firm is through preparation: having clear plans, established protocols, and an expert team that is trained and ready to act. 

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.



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The day the crosswalk music died: Iconic Buddy Holly Glasses to be lifted from hometown crosswalk on Trump directive

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Fans of the Buddy Holly crosswalk in his hometown of Lubbock, Texas, with a painted depiction of the rock and roll legend’s iconic glasses, will soon have to say goodbye to it. That’ll be a day that will possibly make them cry.

Lubbock City Council members said this week they have no choice but to remove it, to comply with a directive from the Trump administration and Republicans to rid the public roadways of any political messages or artwork.

Laredo, in South Texas, removed a mural in October that protested the border wall along the southern border with Mexico. In August, Florida officials removed a rainbow-colored crosswalk outside the Pulse nightclub where 49 people were gunned down.

Lubbock’s crosswalk was first installed in 2020 and is near the Buddy Holly Center, a downtown museum with exhibits honoring Lubbock’s most famous native son.

“It’s such a tasteful cross section and people like it. But what do you do?” said City Council Member Christy Martinez-Garcia, who was among those questioning why it had to go.

Lubbock received a letter from the Texas Department of Transportation with “some harsh wording” that threatened the possible loss of state or federal funding for road projects if such artwork was not removed, David Bragg, Lubbock’s interim division director of public works, told council members on Tuesday.

“This was very broad letter. I don’t think it was intended to go after, say, the Buddy Holly glasses. Unfortunately it did,” Bragg said.

Mayor Mark McBrayer said the city had no choice but to comply.

“Probably everybody here got some communication from people wanting that not to be the case,” McBrayer said. “But I don’t really feel like we have the wherewithal to do anything about that without trying to litigate it and I don’t think there’s any appetite here anyway.” Bragg said the removal will happen during normal maintenance next year.

On Oct. 8, Abbott directed the department to ensure that all Texas cities and counties are in compliance with federal and state guidelines on roadway safety and that symbols, flags and other markings conveying social or political messages are prohibited, as well as any signage and signals that don’t directly support traffic control or safety.

“Texans expect their taxpayer dollars to be used wisely, not advance political agendas on Texas roadways,” Abbott said in a statement.

Abbott’s office did not immediately respond to an email seeking comment on Friday.

Abbott’s directive came after Trump’s Transportation Secretary Sean P. Duffy sent letters to all U.S. governors in July saying that intersections and crosswalks must be kept free from distractions.

“Roads are for safety, not political messages or artwork,” Duffy’s statement said.

Holly was born and raised in Lubbock, located in northwest Texas. He decided to play rock and roll music after seeing Elvis Presley perform in 1955. His best known songs include “That’ll Be the Day,” ’’Rave On” and “ Peggy Sue.”

Holly was only 22 when he died in a Feb. 3, 1959, plane crash near Clear Lake, Iowa, that also killed Ritchie Valens and J.P. “Big Bopper” Richardson. The three rockers’ deaths were immortalized in Don McLean’s 1971 song “American Pie,” and became known as “the day the music died.”



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Despite AI bubble fears, Warren Buffett’s Berkshire Hathaway buys shares of hyperscaler Alphabet

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Wall Street has been consumed for months with fears that the artificial intelligence boom is actually a bubble about to pop, but that didn’t stop Berkshire Hathaway from buying shares of a top AI hyperscaler.

Warren Buffett’s conglomerate revealed in a regulatory filing late Friday that it purchased 17.8 million shares of Google parent Alphabet during the third quarter. The stock jumped 4% in after-hours trading yesterday.

It was the biggest stock addition last quarter and was worth about $4.3 billion at the end of September. Berkshire also bought shares of Chubb, Domino’s Pizza, Sirius XM and Lennar.

Meanwhile, Berkshire maintained its position in Amazon, another AI hyperscaler, in the third quarter.

The addition of Alphabet comes amid a massive rally. Even after the most recent AI-fueled stock market selloff, Alphabet shares are still up 46% this year.

To be sure, Alphabet has been on Berkshire’s radar in the past. In 2019, Buffett’s right-hand man at the time, the late Charlie Munger, admitted that he felt “like a horse’s ass for not identifying Google better. I think Warren feels the same way.”

Back then, Google’s dominance in search piqued Berkshire’s interest. But today, the company is among the tech giants leading the charge into AI.

Alphabet, Amazon, Meta Platforms and Microsoft alone are spending hundreds of billions of dollars a year with no signs of a slowdown.

Morgan Stanley has estimated AI hyperscalers plan to spend about $3 trillion on data centers and other infrastructure through 2028.

The relentless capital expenditures, much of which is coming via debt, have made Wall Street nervous about whether AI companies will be able to translate all those outlays into sustainable revenue and profits.

With Buffett due to step down as Berkshire’s CEO by year’s end, it’s not immediately clear whether he, successor Greg Abel, or another top executive made the call to buy Alphabet stock.

And investors may not hear directly from the “Oracle of Omaha” on the matter. In a letter published Monday, Buffett said he’ll be “going quiet,” and will no longer write Berkshire’s annual report, nor talk “endlessly” at the annual meeting.

Leading up to Buffett’s departure, Berkshire has been taking a cautious stance on the stock market as well as company acquisitions, sending its cash pile to record highs.

Buffett’s closely followed stock portfolio continued to shrink overall, as last quarter marked three straight years of net selling. The most recent round of selling included more shares of Apple, which Berkshire has been steadily offloading for more than a year.



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Trump, who mocked Biden’s use of autopen, caught posting identical signatures on pardons

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The Justice Department posted pardons online bearing identical copies of President Donald Trump’s signature before quietly correcting them this week after what the agency called a “technical error.”

The replacements came after online commenters seized on striking similarities in the president’s signature across a series of pardons dated Nov. 7, including those granted to former New York Mets player Darryl Strawberry, former Tennessee House speaker Glen Casada and former New York police sergeant Michael McMahon. In fact, the signatures on several pardons initially uploaded to the Justice Department’s website were identical, two forensic document experts confirmed to The Associated Press.

Within hours of the online speculation, the administration replaced copies of the pardons with new ones that did not feature identical signatures. It insisted Trump, who mercilessly mocked his predecessor’s use of an autopen, had originally signed all the Nov. 7 pardons himself and blamed “technical” and staffing issues for the error, which has no bearing on the validity of the clemency actions.

The questions about Trump’s signature come amid a new flurry of clemency and weeks after the president claimed to not even know Changpeng Zhao, a crypto billionaire he pardoned last month. He said in an interview with 60 Minutes that the case had been “a Biden witch hunt.”

“A basic axiom of handwriting identification science is that no two signatures are going to bear the exact same design features in every aspect,” said Tom Vastrick, a Florida-based handwriting expert who is president of the American Society of Questioned Document Examiners.

“It’s very straightforward,” said Vastrick, who compared the apparently identical images, now only visible through the online Internet Archive, with the replacements at AP’s request.

Chad Gilmartin, a Justice Department spokesperson, said the “website was updated after a technical error where one of the signatures President Trump personally signed was mistakenly uploaded multiple times due to staffing issues caused by the Democrat shutdown.”

“There is no story here other than the fact that President Trump signed seven pardons by hand and DOJ posted those same seven pardons with seven unique signatures to our website,” Gilmartin said in a statement to AP, referring to the latest wave of clemency Trump has granted in recent weeks.

White House spokesperson Abigail Jackson wrote in an email that Trump “signed each one of these pardons by hand as he does with all pardons.”

“The media should spend their time investigating Joe Biden’s countless auto penned pardons, not covering a non-story,” she wrote.

Trump has been an outspoken critic of Biden’s use of the autopen to conduct executive business, going as far as to display a picture of one such device in place of a portrait of his predecessor in a new “Presidential Walk of Fame” he created along the West Wing colonnade. His Republican allies in Congress last month released a blistering critique of Biden’s alleged “diminished faculties” and mental state during his term that ranked the Democrat’s use of the autopen among “the greatest scandals in U.S. history.”

The Republicans said their findings cast doubt on all of Biden’s actions in office and sent a letter to Attorney General Pam Bondi urging a full investigation.

“Senior White House officials did not know who operated the autopen and its use was not sufficiently controlled or documented to prevent abuse,” the House Oversight Committee found. “The Committee deems void all executive actions signed by the autopen without proper, corresponding, contemporaneous, written approval traceable to the president’s own consent.”

On Friday, Republicans who control the committee released a statement that characterized Trump’s potential use of an electronic signature as legitimate, which it distinguished from Biden’s.

But Rep. Dave Min, a California Democrat on the House Oversight Committee, seized on the apparent similarities in the initial version of the pardons and called for an investigation of the matter, deploying the Republican arguments against Biden in a statement to AP that “we need to better understand who is actually in charge of the White House, because Trump seems to be slipping.”

Regardless, legal experts say the use of an autopen has no bearing on the validity of the pardons.

“The key to pardon validity is whether the president intended to grant the pardon,” said Frank Bowman, a legal historian and professor emeritus at the University of Missouri School of Law who is writing a book on pardons. “Any re-signing is an obvious, and rather silly, effort to avoid comparison to Biden.”

Much of Trump’s mercy has gone to political allies, campaign donors and fraudsters who claimed they were victims of a “weaponized” Justice Department. Trump has largely cast aside a process that historically has been overseen by nonpolitical personnel at the Justice Department.

Casada, a disgraced former Republican speaker of the Tennessee House, was sentenced in September to three years in prison. He was convicted of working with a former legislative aide to win taxpayer-funded mail business from state lawmakers who previously drove Casada from office amid a sexting scandal.

Strawberry was convicted in the 1990s of tax evasion and drug charges. Trump cited the 1983 National League Rookie of the Year’s post-career embrace of his Christian faith and longtime sobriety when pardoning him.

McMahon, a former New York City police sergeant, was sentenced this spring to 18 months in prison for his role in what a federal judge called “a campaign of transnational repression.” He was convicted of acting as a foreign agent for China after he tried to scare an ex-official into going back to his homeland.

McMahon’s defense attorney, Lawrence Lustberg, said he was not aware the pardon documents had been replaced until he was contacted Friday by an AP reporter.

“It is and has always been our understanding that President Trump granted Mr. McMahon his pardon,” Lustberg wrote in an email.

___

Mustian reported from Natchitoches, Louisiana. AP reporter Eric Tucker contributed reporting from Washington.



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