Just Capital CEO Martin Whittaker joins Yahoo Finance's On The Move to discuss how companies are addressing the coronavirus pandemic.
JULIE HYMAN: You're watching Yahoo Finance Live. I'm Julie Hyman. As we see stocks stage a modest rally, very modest rally, to end the first quarter, and we're getting in a lot more dire predictions of what second quarter GDP could look like, amidst all this, we've been talking more and more about the companies that are addressing coronavirus in various ways including, in some cases, by paying their employees, even when they are not working. Many other companies, of course, are furloughing employees right now.
We're joined by Martin Whittaker. He is the CEO of JUST Capital joining us from his home in Connecticut. Martin, it's good to see you. And, essentially, what JUST Capital does is look at issues of stakeholder capitalism.
So, as you look at coronavirus, one might have thought, going into this, that it would be a time where people would sort of throw that out the window, right? This is a time to hunker down, to focus on survival. Instead, we have seen many companies kind of step up and say this is how we're going to take care of their employees. So how do you think this affects the whole debate of stakeholder capitalism?
MARTIN WHITTAKER: I think it defines it. I mean, I think, if you're not able to look after your workers, your customers, the communities where you operate, and your shareholders right now, I mean, that's what every company is trying to balance. So this-- this brings it into an incredibly sharp focus. And I suspect that, going forward, all this talk of stakeholder capitalism and purpose is going to be defined by what companies do over the next several months.
JULIA LA ROCHE: Martin, it's Julia La Roche. And-- and you all have certainly been tracking and following this very closely and, not just the issues that we're seen at hand, as it relates to the fallout and economic impacts from the coronavirus, but, also, just the metrics, the day by-- the day-to-day metrics. My question for you is, do you worry that some of those might actually fall by the wayside here, given what's happening?
MARTIN WHITTAKER: Absolutely, I mean, you know, we have been tracking in a live basis how America's largest 100 public employers are responding. So I can tell you that-- and this is all published on our website, justcapital.com-- 64% of companies have offered special customer accommodations. 53% have set up work-from-home policies. 38% have expanded or instituted new paid sick leave policies. And I could go on.
So the point is, you know, this is what's happening right now, quite rightly. But how much of this is going to stick around? How many company-- which really is your-- your question. It's a key one. How much of this-- especially if a company is taking government money, for example, as part of the bailout, what are they going to be doing on an ongoing basis?
It's one thing to behave like this in a crisis, but, if you really believe-- you know, if you're a Business Roundtable CEO, and you've signed the BRT statement of purpose and said, you know, our-- our purpose, as an organization, is to look after not just our shareholders, but also our workers and our customers and our communities and our suppliers. And you've made changes now in this crisis.
Are you really going to roll those back, you know? And are you doing this because you really think this is going to make you more resilient as a company, you know, more resilient and will help you get through this storm more effectively? Or is this just some sort of short-term expediency? I don't think so.
I think what we're going to find is companies that are better-positioned around stakeholder issues are going to ride out this storm more effectively. They're going to be the ones that drive the economy forward when we need it to in a couple of months and, overall, are going to be much more resilient, which is, you know, I just think that's really the defining-- the defining sort of ideology, if you will, of stakeholder capitalism.
DAN ROBERTS: Martin, Dan Roberts here, thanks for joining us.
MARTIN WHITTAKER: Hey, Dan.
DAN ROBERTS: When we talk about stakeholder, you know, involvement, we're really talking about reputation, right? And this is a time when companies are trying to do the best they can and-- and look as though, not to be, you know, cynical about it, but at least look as though they're putting their employees first and putting customers first.
So you do have companies taking certain measures, in some cases, that look very positive and look like they're really helping employees. Other companies have maybe done some missteps. You know, we've reported on some of the companies that haven't looked so good during this.
We just had Mark Cuban on in the previous hour talking about a number of tweets that are out there from people saying I just learned I was laid off or furloughed via an email, a kind of cold email. And Cuban was saying you can't do that right now because, you know, the way companies act right now is going to be remembered for years to come. What examples have you guys seen, since you track this stuff so closely, of companies either doing it right, or maybe examples of companies doing it wrong and making mistakes that will hurt their reputations?
MARTIN WHITTAKER: Yeah, so what you just said is-- is exactly the right question, right? So, if you're just doing this to look good or if you're just doing this for some sort of branding, then you're going to run into a problem right now because people who work for you who are sick, who are worried about losing their jobs, who are, you know, the most vulnerable employees anyway, this is not a game to them. This is their life. This is their livelihoods.
So-- and the country needs real performance right now. So I think that's what I said earlier. I think this is an acid test right now for those companies that really do walk the talk.
So I'm thinking of companies like Target. You know, Target has raised wages by $2 an hour for 300,000-plus front-line people. It's offered paid leave to workers who are pregnant, 65 years or older for up to 30 days. It's waived its absenteeism policy.
So these are real things that, to us at JUST Capital, exemplify real stakeholder performance. And I think these are the things that are going to help these companies actually do better now and in the recovery.
Other examples have come from the Gap, Starbucks. You know, we've seen even firms like Dollar General-- all right, so Dollar General, you know, you wouldn't think of that as a [? just ?] company, but, you know, they put $35 million available for bonuses for all their-- all store distribution center workers. They-- they're the ones that moved first to reserve first hour of store opening for senior customers.
So-- so, you know, this is not just for like wealthy companies who have a lot of money who are traditionally seen as sort of brand leaders on sustainability or social responsibility. This is-- this is where the rubber hits the road for real employers, you know, real companies who have a tangible role to play in helping people's lives, which is what stakeholder capitalism, you know, is, was, and always will be about.
JULIE HYMAN: So, Martin, take us then beyond coronavirus, right? And I should mention, by the way, as we talk about these various furloughs, we just got the news that JCPenney is going to, it says, temporarily furlough the majority of its hourly associates. We saw Macy's make that move as well.
Coming out of this, the sort of classic stakeholder capitalism issues, things like family and medical leave, things like looking at the broader community, and things like climate change, how do you think companies think about that, as they come out of this? Or is it more sort of specifically employee-focused because of what they've been through?
MARTIN WHITTAKER: Yeah, so I think that, when-- first of all, I don't think this is-- I saw your interview with Ivanka Trump. I don't think this is a sort of a, you know, the-- the air raid siren is over, and we all come out from our bunkers. And now it's business as usual. I don't think that's going to happen.
I think this is going to be a phased recovery where we have millions of people who are now seeking re-employment, where we have companies, where we, as a society, are going to be responding on a rolling basis to different sort of viral hot spots where, you know, the recovery is going to affect different industries differently. Airlines, retail are going to be different from technology and social media, for example.
So-- so I think this is going to be a very sort of uncertain and unequal recovery. And so that is-- is going to be all the more important for companies who want to be resilient who-- who are going to want to be seen to be successful in managing this crisis and successful in their-- in the way they're handling the recovery for them.
Those are going to be the companies that have the best relationships with their workforce, that have retained talent the best, that have the greatest customer loyalty, that have the support of the communities where they operate, and that have created strong supply chains that have, you know, withstood. And they've-- they've stepped up. Maybe they've done the right thing. Maybe they've given, you know, greater forbearance for-- for some of their suppliers who are in financial trouble.
So I just think all of that together is going to make for a more successful company. So, over time, to your question, over the six-- you know, the next several quarters to come, those companies are going to be out in front. And so that, to me, is going to define this idea of-- of a truly stakeholder-led business and completely reshape it.
So I-- I think this applies across the board to all the companies' stakeholders. Of course, companies have to look after their investors. They're going to have to be profitable, and that will happen. But they've also now got this muscle memory for what makes us better. What makes us stronger? And I think that is going to be what-- what sort of, you know, the-- I guess the story that really comes out of this for corporate America.
JULIE HYMAN: Well, Martin, we'll be checking back in with you, as you hold these folks' feet to the fire and as we get past this, hopefully, quickly. Martin Whittaker is CEO of JUST Capital. Thank you, sir.
MARTIN WHITTAKER: Thank you.