Justin Danhoff was the Executive Vice President of the National Center for Public Policy Research for 12 years, where he focused on and headed up the Free Enterprise project, which, as far as I know, is the only organized conservative attempt to stand up to the ideological capture of American public corporations, and now does it in the for-profit sector with Strive Asset Management. Justin recently joined me on my podcast Meeting of Minds to discuss ESG, "Socially Responsible Investing," and the company's strategy to replace the recent woke agenda in corporate life with the excellence agenda. Below you'll find both the full interview below and a lightly edited transcript:
Jerry: When you got into this, conservatives were essentially asleep at the wheel when it comes to corporations: we just assumed corporations were good. We focused on politics, and that could not have been more wrong. How did you know that 12 years before everyone else?
Justin: Well, the National Center was founded with a unique mission in mind, and that mission was to be a voice where we thought the right was the quietest. I loved that mission, and we just took a look at the corporate landscape 12 years ago, and we saw corporations in some instances sprinting, in some instances being dragged, but in all instances moving to the policy of the political left on an array of issues. And it's flown under so many different banners over the years. They have to keep changing the banner once the truth of what lies underneath it comes out. We just started seeing that there were actors involved at numerous levels of engagement, on affinity issues, on union issues, and organizations that ran the spectrum that were involved in something called “shareholder engagement.” Every year there were, you know, 70, 80, 90, 100 groups from the political left that were using their voice, their vote, and their money to influence and change corporate behavior. And 12 years ago we looked out and we saw zero, absolutely zero right-of-center groups doing it. So, we just said “heck, let's give it a shot.” We had no idea what a shareholder resolution really even was.
Jerry: Now you know. Have you ever counted how many you’ve done?
Justin: The last I checked it was over 250.
Jerry: That’s a lot. But even that is a 20th, maybe even a 50th of the proposals that have been out there. It’s crazy, I’m going through it now because I vote on these, and every proxy has two or three of these. And it’s getting to the point where even management is a little sick of it. Do you agree?
Justin: I think what we're seeing specifically this shareholder season is something a little different. You've said in the past that ESG could be considered a luxury good. That we know when everybody's getting fat and everybody's in a 15-year bull market you can afford to spend time on silly externalities that aren't core and central to your mission. But as inflation is going absolutely insane, just like how families have to take a look at their budget and gasp that it's 85 bucks to fill up your tank, or go to the grocery store and have sticker shock when you get to the register, businesses have to make value judgments when it comes to how they're going to allocate their finances.
Let's take a look at Netflix, which, shockingly recently came out with a statement to their employees saying, hey, we're just going to focus on creating excellent content, and not everyone's going to agree with that content. And guess what? If you work on something you don't agree with and you have a problem with it, you can quit. We thought that was an incredible message at Strive, because we're focusing on excellence capitalism by design. If they're taking a look and they're seeing their subscriber base drop for the first time ever (which they are), they should say ‘maybe we shouldn't pay Robin DiAngelo 300,000 dollars next quarter to fly in to tell all of our white employees they’re oppressors, and all of our black employees that they're oppressed, and run some intersectionality chart. Maybe that's not a good use of our money, our talent, and our time. We should focus back on our mission.’
Maybe their first mission was to crush Blockbuster – good job, they did that. But their true mission was probably always to create the best content, and I think this was a sign that they're pushing off the externalities of ESG and focusing back on their core, and we welcome that at Strive. That's what we think businesses should be doing.
Jerry Bowyer is financial economist, president of Bowyer Research, and author of “The Maker Versus the Takers: What Jesus Really Said About Social Justice and Economics.”