Mark Tulay, Test of Corporate Purpose Founder & CEO joins the On the Move panel to discuss the Test of Corporate Purpose Initiative and the results of a recent survey.
JULIE HYMAN: Well, amidst this pandemic, a lot of companies have been stepping up and saying they're going to treat their employees better, or they're going to pay more attention to issues of racial justice. But are they really? Well, there is a new report out that tries to judge whether they are really. And Mark Tulay is joining us now. He's the Test of Corporate Purpose Founder and CEO, which did this report.
And Mark, thank you for joining us. The report essentially found some of them are doing this, but it's mostly companies that were doing it before already. It's not necessarily those that have made these new pledges. So what's sort of the headline finding of this report?
MARK TULAY: Well, I think this is the great reset of capitalism, frankly. And I know that's a lofty statement. But the pandemic racial inequality has kind of reset expectations for corporate CEOs and investors as well And we did this initiative called the Test of Corporate Purpose, and the bottom line is that companies have failed the Test of Corporate Purpose. For all these lofty CEO claims about how they care about stakeholders, workers, and communities, they have not performed according to their pronouncements.
ADAM SHAPIRO: Who do you hold accountable for that? Do you hold the leaders or the investors? Because unless the investors push for that kind of change, there's no motivation for the board of directors or the corporate governance to make the change.
MARK TULAY: Right. And this is kind of a long-term issue, so we're not talking short term here. So I think it's both. I think the-- the corporations, especially the Business Roundtable signatories, 181 signatories came together a year ago, and they said the purpose of corporations is to address stakeholder concerns.
Obviously, shareholders are among them, but they needed to create a new rebalancing. And I think when we looked at the results from the empirical research, over 1 million data points looked at over this kind of great stress test, the companies haven't measured up to what they said they would do. The signatories to the BRT that proclaimed that they were committed to stakeholder capitalism and stakeholder interests underperformed in certain areas and slightly overperformed in others, indicating they did not walk the talk.
DAN HOWLEY: Mark, what were the worst offenders on the list?
MARK TULAY: Well, there-- I think two of them were Tyson's Food and Amazon. So obviously, when-- when workers have to-- in Tyson's Food plants have to-- they can't conform to social distancing requirements, that's-- that's a problem. The positive workers in one plant accounted for 22% of the workers tested for COVID. So they did not live up to the Test of Corporate Purpose.
And Amazon is another company that has been-- certainly has ample resources to address stakeholder, community, and worker interests. But when kind of six employees kind of stood up and said that they-- they didn't believe that the company was promoting safe conditions, they were let go. And there was a massive kind of walkout among Amazon employees because of the company's response to the pandemic. So facts are stubborn things. And companies really, especially those that make these lofty promises to do more, better for those that don't have the financial means, need to step up and walk the talk.
RICK NEWMAN: Hey, Mark. Rick Newman. Just ask you a bit more about Amazon, since everybody is familiar with Amazon at this point. You know, Amazon typically scores very high in surveys of brand reputation when you ask consumers what are their favorite brands. I mean, it's typical that Amazon-- Amazon will be in the top five. What do you-- what do you do about that if the company is basically a kind of a serial offender when it comes to these treatment of employees and things like that, yet it's so popular with consumers?
MARK TULAY: Yeah. It's the-- the great disconnect, right? So I think this is where investors have a role to play. And I didn't mention the companies that had a positive score, and they-- and they ranked in the first quartile-- BlackRock, Salesforce, Baxter, S&P. So our rankings were relative, and they show that, you know, there were kind of companies that really stood out, and stood up, and outperformed during this crisis, and those that weren't.
And I think for-- for Amazon-- and for companies like Marriott or airlines, you can understand where they don't have the resources perhaps to address these kind of issues. But you cannot make that claim for Amazon. They are simply falling short on what they promised, and they need to do better.
JULIE HYMAN: Mark, it's Julie here again. What now? In other words, are you hearing from any of these companies that they want to try to improve? Or where do you think we go from here? If these companies aren't fulfilling their promises now, do you have any hope that they will change in the coming years?
MARK TULAY: Yeah. I have a lot of hope, and I-- and I think this is kind of a call to action for all companies. And one thing that I think it would be helpful is company to commit to measures of corporate purpose excellence, right? So what's lacking in the market is details on what does that really mean? Is that just a marketing thing? Or is there-- are there facts and disclosures that can back that up?
So I think what company and CEOs, especially the 181 largest companies in the US that signed the Business Roundtable pledge to-- as I said before, they should disclose how they're living up to their commitments. There should be information for investors. It shouldn't be just glossy, slick commercials.
There needs to be more information so that investors can make better informed decisions, because right now they're not getting the complete picture from-- from companies. And that's what our research showed was that there was a gap between disclosure, there's a gap between performance, and these companies need to do better.
JULIE HYMAN: Transparency and accountability. Mark Tulay, thank you so much. Test of Corporate Purpose Founder and CEO. Appreciate it, Mark.