U.S. CEOs can afford principled stand against Trump
Merck & Co. CEO Ken Frazier (R) listens to U.S. President Donald Trump speak during a meeting with manufacturing CEOs at the White House in Washington, DC, U.S. February 23, 2017.
NEW YORK (Reuters Breakingviews) - Ken Frazier is standing up to Donald Trump. On Monday, the Merck boss quit the White House manufacturing council to protest the president’s dismal response to Saturday’s white-supremacist rally in Charlottesville, Virginia. National duty, ego and fear of a Twitter rebuke may have kept corporate chieftains in their seats, but they have little to show for staying.
He’s not the first to jump. Disney's Bob Iger and Tesla's Elon Musk resigned from the strategic and policy council in June to protest Trump withdrawing the country from the 2015 Paris climate-change accord. Yet most others think it’s still worth having a seat at the table to influence policy, some of the firms have told Breakingviews.
Deregulation aside, though, the Trump administration has made little progress on issues of most concern to Corporate America. The White House and congressional Republicans have yet to agree on even the broad outlines of tax cuts. Debt-ceiling and budget talks may well push the effort into 2018.
Whether to criticize a sitting American president is always a tough call. Frazier, for example, leads a pharmaceutical company subject to close regulatory scrutiny. Trump has been considering an executive order aimed at reducing drug prices – and hinted at potential retaliation on Monday, tweeting, “Now that Ken Frazier of Merck Pharma has resigned from President's Manufacturing Council, he will have more time to LOWER RIPOFF DRUG PRICES!”
Sometimes silence isn’t an option. For Frazier, an African-American man, it was the president’s tardy and pathetic reaction to white supremacists marching through a university town carrying swastikas, Confederate flags and KKK signs. Trump would only condemn “hatred, bigotry and violence, on all sides.” Morally, standing up against U.S. neo-Nazis should be a no-brainer.
It can also be a smart business move. Companies need to attract the broadest range of talent to compete. Nor can they afford to alienate their customers, especially consumer-facing companies. PepsiCo, whose boss Indra Nooyi sits on the strategic and policy forum headed by Blackstone's Stephen Schwarzman, faced a social-media backlash recently over a TV ad that seemed to make light of the Black Lives Matter protests.
A Trump Twitter tongue-lashing has little power, now, too. Merck’s stock was up around half a percent in mid-morning trading, better than Pfizer and Johnson & Johnson. Perhaps that’s what waverers need to see to realize they can afford to take a principled stand against the president.