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How much money can a woke corporation lose before it’s failed its shareholders so badly that it’s breached its duties? That’s the question that none other than the world’s richest businessman is asking.
Twitter owner Elon Musk took a shot at Target on Friday morning after JP Morgan downgraded the retailer’s stock, saying that it was only a matter of time before the company faced lawsuits for its controversial actions that have led to the company losing billions of dollars in market value.
The core, indeed the sole purpose of a corporation is to make money for its shareholders. In yet another salient of the Long March through the Institutions, though, that core, clear purpose has been deliberately undermined, with the advent of so-called ESG (“Environment, Social and Governance”) regulations. These regulations have changed corporations from profit-making enterprises, to a hobby-horse for every woke cause imaginable.
The argument behind ESGs is that, otherwise, evil corporations will run amok and destroy us all. As if corporations aren’t actually bound by the law of the land. Leo E. Strine, Jr., Chancellor of the Delaware Court of Chancery, wrote for the Wake Forest Law Review, that: “Instead of recognizing that for-profit corporations will seek profit for their stockholders using all legal means available, we imbue these corporations with a personality and assume they are moral beings”. (Emphasis added.)
While, as Strine acknowledges, corporations must be bound by the law (including environmental laws), expecting them to act according to the moral imperatives of a select group is foolish. As the left love parroting, “corporations are not people” — and only people can act morally.
More importantly, when a corporation panders to the moral demands of a tiny minority to the point of losing vast amounts of money, what redress should its shareholders seek?
Target made “emergency” calls in mid-May to managers and senior directors after the company faced backlash for its Pride collection, which included “tuck-friendly” female swimwear.
“We were given 36 hours, told to take all of our Pride stuff, the entire section, and move it into a section that’s a third the size. From the front of the store to the back of the store, you can’t have anything on mannequins and no large signage,” a Target insider told Fox News.
The woke company has since faced boycotts, lost more than $12 billion in market value, and faced its longest losing streak in years.
JP Morgan said that it was downgrading Target’s stock because of the “recent company controversies.”
If Target has torpedoed its profits in the pursuit of woke points, that’s nothing compared to Anheuser-Busch, whose signature brand has been apparently irreparably damaged by its marketing campaign headed by a transgender.
Musk responded to the news by tweeting: “Won’t be long before there are class-action lawsuits by shareholders against the company and board of directors for destruction of shareholder value.”
It must also be asked at what point senior executives are allowed to pursue personal ideological crusades, especially ones which reek of conflicts of interest.
The vice president for brand management at Target also serves as treasurer of an LGBT group that has received millions of dollars in donations from Target and urges schools to adopt policies to help trans and nonbinary school students hide their “gender identity” from their parents.
The Daily Wire
And it shows. It looks very much as though someone is grinding personal ideological axes, at the expense of shareholders’ profits.
Nothing a good, old American lawsuit wouldn’t fix.
