DeSantis: Standing Up to Corporate Activism

On April 16, 2019, Florida Gov. Ron DeSantis visited U.S. Coast Guard Station Marathon to meet with Monroe County and municipality officials. He discussed Hurricane Irma recovery, water quality, and coral restoration. Also in attendance were Lieut. Gov. Jeannette Nunez, Department of Economic Opportunity Director Ken Lawson, Secretary Noah Valenstein of Environmental Protection, and Florida Department of Emergency Management Director Jared Moskowitz. “We have a good plan to achieve a lot on behalf of the folks in the Florida Keys,” DeSantis said. Photos by Kristen Livengood

Florida’s governor, Ron DeSantis, has taken to the pages of The Wall Street Journal’s editorial section to explain why he fought back against Disney’s corporate activism by stripping the company of its special treatment under the law. He writes:

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On Monday, I signed the law ending the Walt Disney Co.’s self-governing status over 43 square miles in central Florida, an area almost as big as Miami. Disney no longer has its own government. It has to live under the same laws as Universal Studios, SeaWorld and every other company in our state and is still on the hook for the old district’s municipal debt.

Disney’s special arrangement, which dates to 1967, was an indefensible example of corporate welfare. It provided the company with favorable tax treatment, including the ability to assess its own property valuations and to enjoy the benefits of regional infrastructure improvements without paying taxes toward the projects. It exempted Disney from Florida’s building and fire-prevention codes. It even allowed Disney to build a nuclear power plant and to use eminent domain to seize private property outside the district’s boundaries. While special districts are common in Florida, Disney’s deal was conspicuous in the massive benefits it conferred. Disney’s self-governing status endured because the company’s unrivaled political power in Florida made its arrangement virtually untouchable.

For more than 50 years, the state of Florida put Disney on a pedestal. That all changed last year, when left-wing activists working at the company’s headquarters in Burbank, Calif., pressured Disney to oppose Florida’s Parental Rights in Education Act. The legislation bans classroom instruction on sexuality and gender ideology in kindergarten through third grade and requires that sex instruction in other grades be age-appropriate. Disney executives were seen on videos boasting about the company’s plans to inject sexuality into its programming for children.

Democrats often rail about corporations’ nefarious influence over politics and oppose favorable exceptions for big companies. Yet they supported keeping Disney’s special self-governing status. This confirms how much the modern left has jettisoned principle in favor of power. As long as large corporations help advance the left’s woke agenda, the left is willing to do their bidding.

The question many people asked me after the Disney face-off was: Why would a company like Disney tarnish its family-friendly brand, built up over almost 100 years, by publicly aligning itself with the fringe left’s agenda to limit the rights of parents to have a say in what is taught to very young children? The answer lies in how the left has pressured big companies like Disney to use their power to advance the woke political agenda.

As a basic matter, the fiduciary duty that the CEO and board of a publicly traded corporation owe to shareholders is inconsistent with allowing the company to be turned into a partisan political fighting machine. Fiduciary duty aside, most CEOs and directors understand that as a matter of prudence, big companies seldom benefit from taking positions on contentious political issues, particularly those unrelated to their businesses.

In recent years, two factors have altered this calculation. First, groups of employees at some corporations want their employer to reflect their own political values. Such employees aren’t a majority, but they are loud and militant. Executives often try to placate these employees, without success. Instead, such gestures embolden the entitled employees to presume that their employer will fall into line in the next political battle. The inmates soon run the asylum.

The second factor is power. A traditional corporate executive may have power within the company, but a woke CEO can use the corporate bully pulpit to exert influence over society. This is especially true amid the push for environmental, social, and governance responsibility in corporate America. ESG provides a pretext for CEOs to use shareholder assets on issues like reducing the use of fossil fuels. ESG is a way for the left to achieve through corporate power what it can’t get at the ballot box.

DeSantis goes on to explain Florida’s efforts to curb corporate ESG activism, and to explain that woke ideology “is a form of cultural Marxism.” DeSantis is fighting that woke ideology to make Florida a prosperous state. You know Your Survival Guy has been ringing alarm bells about the ESG movement and its effects on America for some time. Read here:

Action Line: When you want help building a portfolio that eschews ESG investments, and gives you the power over your individual stocks and bonds, let’s talk.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.