When large companies embrace progressive orthodoxies that alienate a majority of their customers, it often creates an opening for competitors in the market to capture that audience. For example, if Disney launches a national crusade to teach six-year-olds about sexual orientation and gender identity, this should create an opportunity for, say, Universal Studios to step up and fill the void with its theme parks. Or for Paramount Pictures to do the same thing with its films. (Disclosure: The Daily Wire has announced plans for kids entertainment content.)
Here’s the problem: There’s more to the Disney story than a cowardly CEO who bends the knee merely to placate his millennial employees. The real story is that Disney’s top shareholders effectively encourage similar behavior as well. It’s true that a CEO doesn’t work for their employees (that’s obviously backwards), but a CEO does work for their shareholders. So when the shareholders express a view on social issues, the CEO is beholden to follow them. Disney’s top three shareholders are BlackRock, State Street, and Vanguard — three of the largest asset managers in America that collectively manage over $20 trillion — and they are using the funds of everyday American citizens to tell CEOs to adopt ideological values under the banner of Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) principles. I wrote about this earlier this year in the context of BlackRock’s activism at Exxon, the world’s largest oil company.
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