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Harvard Business School Professor, former Medtronic CEO

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Yahoo! Finance: Disney vs. DeSantis: ‘Florida Needs Disney World,’ Harvard Professor Says

Credit: Yahoo! Finance

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Video Transcript:

Harvard Business School Senior Fellow Bill George examines the financial outcomes of Florida Governor Ron DeSantis revoking Disney’s special tax status and Disney’s values.

Video Transcript

DAVE BRIGGS: It’s almost pay per view worthy, Disney versus DeSantis. It is the battle dividing Florida along party lines. But across the country, CEOs in all industries are eyeing the daily developments here, wondering how it might impact their company, how they should navigate these choppy political waters. Bill George is the former chairman and CEO of Medtronic, now a professor at the Harvard Business School. He joins us now. Good to see you, Bill.

BILL GEORGE: Thank you.

DAVE BRIGGS: Let’s go back, if we can, to the start of this mess. Disney CEO Bob Chapek wanted to stay out of the controversy over Disney’s so-called Don’t Say Gay legislation, but the combination of angry employees and former CEO Bob Iger coming out against the law. He really had no choice. He offered this relatively mild statement. How do you think he handled it?

BILL GEORGE: Well, he should have thought about all these things first, I believe. I don’t think he did his homework. We’re in a different world today. He was acting like he was back in the 1990s. In this world of 2022, you have all kinds of stakeholders who expect you to take a position, especially your employees. Employees have found their voice. And particularly, in this post-COVID world, they want to be respected, whether it’s a Minneapolis CEO when George Floyd was murdered or people on the LGBTQ+ side that want to be respected and heard from. They want their CEOs to speak on their behalf.

And when they don’t do that, as Bob Chapek didn’t, they get very upset and it leads to the kind of uproar we’ve had. And then they get to the worst case, which is a political crossfire with the politicians. And that’s the last thing any company wants to get into. And Disney is right in the thick of it, and it’s struggling to get out of this mess, as you called it.

DAVE BRIGGS: Even after the statement, he had the employee walkout. So what could Bob have done to keep them his employees happy and somehow stay out of the crosshairs of the governor?

BILL GEORGE: He should have gone back months before, talked to his board, talked to his leadership team. What do we stand for? Disney has always been very pro-family, but also very gay-friendly, if you will. And they should have made those points very clearly. And when this legislation started in Florida, they should have had a position ready to go. And they didn’t have to lead with their chin, but they should have had a position that was true to their mission and values of what Disney is that accepts everyone for who they are.

DAVE BRIGGS: So, as I mentioned, CEOs across the country are shaking a bit in their boots. What are you hearing from them, and what’s your advice?

BILL GEORGE: Well, they’re very concerned. They don’t want to get caught into this crossfire either. But they are all going back now, I think, in really thinking about, what do I stand for? What issues should I get involved in? And when shouldn’t I get involved in? And how do I avoid getting in the crosshairs of some politicians. They may get caught anyway, but if they’re true to their mission and values, this is a question of, should I get out of Russia because of the Ukraine war?

These things are coming up every way right now, and CEOs today need to know how to lead through a crisis because we go from one crisis to the next. We go to from COVID to George Floyd to Russia and Ukraine. And there’s probably another one just around the corner. So they need to be prepared to deal with these and have a position that’s true to their company.

For instance, Johnson & Johnson has taken a very clear position that we’re there to help people. And so if that means we’re going to stay in Russia, we have lifesaving drugs, we don’t want to get out. Hey, I respect that position. It goes to their credo. That’s what each CEO should do, to go true back to their mission and values.

DAVE BRIGGS: A fascinating poll came out last week showing the majority of the country is against the government punishing business over their political beliefs. But the fascinating part within this is Democrats were far more supportive of business than were Republicans. What do you make of that political dynamic we have today?

BILL GEORGE: I’m smiling because when I was a boy growing up, the Republicans were seen as the party of big business. And Democrats are seen as the party of the working class, the blue collar workers. And things seem to have flipped. And we’re much more into cultural wars. Businesses are not interested in that. They’re interested in helping their customers make a difference in their lives, whether Disney is bringing fun to people or organizations in the apparel business, bringing joy to them, or Medtronic providing good healthcare to help save lives. That’s what they want to do. But they need to represent all their employees and all their stakeholders. And I think that’s what they’ve lost sight of here.

DAVE BRIGGS: What’s fascinating is, I read this statement, and I want you to guess what party it comes from. A senator– it’s very simple. We need to see a majority of American corporations as American. They don’t act in the best interests of the country. They act in the best interest of shareholders, period. Was that a Republican or a Democrat?

BILL GEORGE: I have no idea. I probably would have normally would have guessed a Democrat today, maybe a Republican. But I’ll tell you this. It’s not just the shareholders today. It’s not just the world it was in the ’80s and ’90s, the shareholder primacy. It’s the world of stakeholders. They have to operate in the best interests of their customers. They have to operate in the best interests of their employees. And they need to find an alignment with those interests with their shareholders’ interests.

DAVE BRIGGS: That statement continued. We are, as policymakers, we need to be acting in the best interest of the country, not big business. It sounded like Elizabeth Warren, it was Marco Rubio. Stunning when I got to the finish of it. How do you think this plays out for Disney? Their special exemption wouldn’t actually go into effect until June 2023. Can they wait out the governor?

BILL GEORGE: Yes, they may have to. There’s this billion dollar question about who’s paying off the bonds, which legally have to be paid off. And if that’s not clear, I’m not sure Orange County has the money to do that, the Orlando County. And so they are going to have a continued battle. But understand the governor has different objectives than Disney. And so Disney can’t meet all of his needs because he is working a whole political angle here.

And that’s why I say, they don’t want to get caught up in that, but they have to run a great Disney World, I can tell you that, that welcomes everyone to their premises. And that’s the most important thing for them. And they have to make sure this doesn’t turn against them. And they probably have some legal recourse on this whole latest legislation that had to do with pulling back that special district. And there are many unintended consequences, frankly, that have not been thought through there that it will give Disney more ammunition.

A good example is Ed Bastian at Delta a few years ago, the Georgia legislature, withdrew a $41 billion– a million dollar tax break that they got on a fuel savings. They’ve been giving it for 30, 40 years. And he stood up, and he said Disney’s values are not for sale. A year later, the legislature restored that and retroactively.

So in the end, Disney didn’t really throw out– Delta didn’t really get hurt by that. So I’m optimistic that Florida needs Disney World. I can tell you that. It’s a huge revenue producer. I was just in Orlando, actually, for a soccer game, not for Disney World. But I can tell you, it’s created everything around there. They need that. And all the merchants, all the hotel owners, and all the restaurants desperately need Disney World. They– Florida can’t do without Disney World. So it’s a question, who needs who more?

DAVE BRIGGS: 70,000 plus jobs as well. Bill George–


DAVE BRIGGS: –Harvard professor, former chairman, and CEO of Medtronic, it is tricky times to be a CEO. Thank you, Bill.

WSJ: Disney’s Clash With Florida Has CEOs on Alert

Disney’s Special Tax District, Explained
Credit: AP

In private meetings and coaching sessions over the past few weeks, top business leaders have been asking a version of the same question: How can we avoid becoming the next Walt Disney Co.? 

The fallout from the recent political spat between Disney and Florida Gov. Ron DeSantis has alarmed leaders across the corporate sphere, according to executives and their advisers, and heightened the challenges for chief executive officers navigating charged topics.

At many companies, vocal employees have in recent years pushed bosses to take public stands on social and political issues. Florida’s pushback against Disney has raised the stakes.

“The No. 1 concern CEOs have is, ‘When should I speak out on public issues?’ ” said Bill George, former chairman and CEO of Medtronic PLC and now a senior fellow at Harvard Business School. “As one CEO said to me, ‘I want to speak out on social issues, but I don’t want to get involved in politics.’ Which I said under my breath, ‘That’s not possible.’ ”

Some executives might be relieved. The old idea that CEOs should focus on shareholder returns and stay out of politics lingers in some corporate suites, even in a politicized age of public social-media discussions and more-activist workforces.

Certainly the consequences of weighing in appear to be changing. Lawmakers for years have expressed displeasure when companies take public stands on issues such as voting access, through critical tweets, public remarks and, in some cases, calls for public boycotts. Disney’s experience shows a willingness to go further, corporate advisers say, by challenging arrangements that have helped a company to operate.

Ron Williams, former CEO of Aetna, says, ‘It’s not enough to know what you want to do. You have to be artful in how you do it.’

Gov. DeSantis, a Republican, in April signed into law a bill that would terminate a special tax district that has allowed Disney to self-govern the land that houses its Orlando-area theme parks, hotels and resorts for more than a half-century. Questions remain about the law’s impact on Disney and surrounding communities. Gov. DeSantis cited Disney’s opposition to Florida’s Parental Rights in Education bill, which was signed into law in March and which critics call the “Don’t Say Gay” bill. He called Disney a “woke” corporation.

David Berger, a partner who specializes in corporate governance at law firm Wilson Sonsini Goodrich & Rosati, said politicians seem increasingly comfortable taking on business when it is advantageous for them. “It used to be that Republicans especially—but both parties—liked big business,” he said. “And now what you’re seeing is both parties like to use big business as political footballs one way or the other.”

Some executives say they have learned to monitor issues that could consume public attention and increase pressure for some response. Some use employee affinity groups to help flag potentially troublesome issues.

“You make it a safe forum where people feel comfortable talking about concerns or whatever, and out of that, there’s really a kind of responsibility on our part to pick up on things that really do demand some attention,” said Nancy Langer, CEO of Transact Campus Inc., a financial- technology company based near Phoenix. “I look at that as a feedback loop for us.”

Some of the topics of employee pressure involve Republican-backed measures, such as the new abortion law in Texas and new voting laws. Democrats have pushed executives to weigh in, and Republicans have pushed them to keep out. Climate and diversity issues also are hot buttons, as is the Jan. 6, 2021, riot at the U.S. Capitol.

Democrats also have criticized companies. President Biden, facing heat on inflation, has accused meat and oil companies of price gouging.

But Disney’s recent experience in Florida has captured the attention of C-suite executives at companies big and small, given the impact on its operations, many say.

“I think probably anybody sitting in a leadership role follows it to some degree,” said Julie Schertell, chief executive of Alpharetta, Ga.-based manufacturing company Neenah Inc., which has around 2,500 employees.

Ms. Schertell said the Disney drama reminds her as a CEO that she must look at situations from every angle. “Because I want folks to assume positive intent, like ‘Here’s what we’re trying to do, and if it feels like a misstep, let’s talk about that. And of course, correct on it,’ ” she said.

Staying silent has its own risks. Disney initially declined to take a public stance against the Florida bill, which bans classroom instruction on sexual orientation and gender identity through third grade. Disney CEO Bob Chapek told employees he didn’t want the company to become a “political football.” That sparked an outcry from some employees, and Disney reversed course and spoke out against the bill.

Washington veterans advise that building relationships with political leaders in advance, particularly in off-cycle election years, can be helpful during times of crisis. Ron Williams, the former chairman and chief executive of Aetna who sits on the boards of Boeing Co., Johnson & Johnson and American Express Co., said he counsels CEOs to find advisers who know how to navigate the political terrain.

“Companies often deal in substance, and politicians often deal with foils,” he said. “And so, you know, companies can inadvertently become a foil for different political issues. It’s not enough to know what you want to do. You have to be artful in how you do it.”

Most current CEOs rose by gaining customers or boosting profit margins, not navigating hot-button social issues, and so aren’t trained on how to respond, Harvard’s Mr. George said. They must prepare quickly.

“It is an even more challenging job,” Mr. Williams said. “Running the business turns out to be table stakes.”

Hiring Insights Podcast: Hiring Executives and Authentic Leadership: From a CEO and Board Perspective

Join Mosah Fernandez Goodman as he hosts Bill George, a corporate superstar who helmed Medtronics and served on the Boards of Goldman Sachs, ExxonMobil, and Target Corporation. Bill discusses insights into the executive search and hiring process and the evolution of qualities needed for a leader over the past century; from working with your hands, the Steve Jobs era of needing the smartest candidate, to now wanting leaders for their hearts. With years of Corporate Board experience, Bill guides you through the process of landing your first board role and how to succeed.

CNBC: Time Warner and AT&T deal in jeopardy?

Fred Hassan, Warburg Pincus partner & managing director, and Bill George, Harvard Business School professor, weigh in on if President-elect Donald Trump will redefine the government’s relationship with business and the Time Warner-AT&T deal.

CNBC: Mylan CEO’s Testimony was a Huge Blow to the Entire Pharma Industry

Tune in to CNBC’s “Squawk on the Street” at 10am Tuesday. Bill George will be a guest.

The disregard for children’s health that Mylan CEO Heather Bresch demonstrated in her testimony to the House Oversight and Government Reform Committee directly harms consumers.

Less directly, Mylan’s exceptionally high price increases erode public confidence in all medical companies, including those investing billions in research to help people suffering from life-threatening diseases. 

When companies like Mylan, Valeant and Turing Pharmaceuticals — which have grown profits through financial engineering, not drug discovery — take advantage of loopholes in our health-care system, they create public outrage against all medical companies. I have a growing concern this outrage will have dire consequences for research-based pharmaceutical companies, and could even lead to price controls.

Rather than acknowledging her mistakes in raising EpiPen prices 500 percent from $100 to more than $600, Bresch has tried to obfuscate her actions by shifting the blame to health plans and pharmacy benefits managers that have instituted co-payment and high deductible plans to keep premiums low for strapped consumers. Mylan’s largest price increases came shortly after the FDA pulled its competitors off the market, leaving the firm with a monopoly.

Meanwhile, Bresch claimed Mylan was not making much money on EpiPens while admitting it earned $100 on a net selling price of $274 (after normal discounts). In her testimony she said Mylan earned $100 on a net selling price of $274 (after normal discounts). It turns out that Bresch misstated Mylan’s profit on Epipens – it’s actually $160, not $100, as the Wall Street Journal reported. That is a profit margin of 60 percent – exceptionally high by any standard. Yet she could not answer basic questions from Congress about revenues from EpiPens and their contribution to Mylan’s profits.

Bresch used EpiPen’s success to fuel her rapid rise to the CEO’s office, yet she proved in that testimony that she is not stepping up to the responsibilities her role demands. Publicly, she led with her chin by saying, “I am running a business to make money” as if she were running a financial fund.

Bresch may feel protected from the wrath of Congress and the public by Mylan’s highly unusual governance procedures, established when the company executed a tax inversion to The Netherlands in 2015 after it turned down a purchase offer from rival Teva valued at more than twice today’s stock price. Under its procedures shareholders don’t get to nominate board members; only the board can do that. 

Authentic health-care companies from Mayo to Merck understand they are in business to restore people’s health, and if they did that well, profits would follow. Mylan seems to be ignoring Merck founder George Merck’s admonition, “Medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear.”

At Medtronic, our founder Earl Bakken charged us with “using biomedical engineering … to restore health.” As Medtronic revenues grew from $400 million in 1985 to $30 billion today, every CEO has faithfully followed Bakken’s mission through good times and difficult ones. Medtronic’s proudest achievement over these 31 years is not its growth in shareholder value from $400 million to $120 billion, but fulfilling its original mission by expanding the number of new patients restored each year from 150,000 to 30 million today. 

In 1990 in response to public concerns over rising health-care costs, Medtronic instituted a “no price increase” policy. This put pressure on us to reduce our costs while spurring investment in more advanced products. It paid off with rapid growth and high profits, which were invested in research and development, expansion into emerging markets, and acquisitions to broaden the company’s base.

One of Bresch’s only defenders in this experience is disgraced former hedge-fund manager Martin Shkreli, who resigned as CEO of Turing after his outrageous 5,500 percent price increases on an AIDS drug fueled public anger. To Bresch’s credit, she tried to answer questions, while just Shkreli smirked in his Congressional appearance while taking the Fifth Amendment. He later arrogantly called the congressmen, “imbeciles.” The public furor these bad actors have stirred up will not subside soon, especially in this election year, and are stimulating legislative actions rather than market-based solutions.

Pharmaceutical companies have long argued that they need patent protection and pricing freedom in order to justify returns on large investments in research. Yet that argument falls flat in the cases of Mylan, Valeant and Turing, which historically have not invested in research. As long as these types of companies stay in news, public pressure will mount for government price controls or at least the ability to negotiate prices. The unintended consequence of such actions could be cutbacks in high-risk research aimed at curing and healing the most threatening diseases that require high returns to justify high costs.

In contrast, the major pharmaceutical companies base their success on high-cost, high-risk science with long lead times and no assurance of returns. In recent years some short-term investors have argued for cutting back research and simply buying drugs from others. Yet those who have committed to research without hesitation — Merck, Amgen, Genentech and Novartis, just to name a few – have created breakthrough drugs that saved millions of lives and generated high returns on their investments for their long-term shareholders.

With pharmaceutical prices now under public scrutiny, responsible leaders of medical companies should call for and demonstrate restraint in setting prices for their products, especially when they enjoy protected positions. Thus far, the only CEOs to speak out publicly against these abuses are GSK’s Andrew Witty, Merck’s Ken Frazier and Allergan’s Brent Saunders. They should be voluntarily joined by other CEOs and industry associations like PhRMA and AdvaMed.

The time for health care’s leaders to act is now, before Congress acts for them.

Commentary by Bill George, a senior fellow at Harvard Business School and the former Chairman and CEO of Medtronic. He previously served on the board of Novartis. He is also author of the book “Discover Your True North.” Follow him on Twitter @Bill_George.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.


This article was originally posted on CNBC on 09/27/16.

University of St. Thomas: The Forum on Workplace Inclusion – Day 3 Keynote

The Forum was thrilled to have Bill George as our closing speaker on Day 3. Former Chairman and CEO of Medtronic, Senior Fellow at the Harvard Business School, and author of Discover Your True North, Bill discusses finding your own True North – the internal compass that sets one on a path toward their fullest potential as a leader. Today’s global business community calls for leaders who will change the world for the better and inspire others around them to do the same.

This content was originally posted to on 05/19/16.

Minnesota Public Radio: Kerri Miller Friday Roundtable

MPR News host Kerri Miller talks with Bill George, Senior Fellow at the Harvard Business School, and Washington University law professor Adam Rosenzweig about corporate tax inversions and why the issue seems to have taken a timid foothold in this year’s presidential election. With both Democrats and Republicans taking aim at companies who employ tax inversion, Kerri delves into the reasons why, what the concerns are with this sort of corporate maneuvering and what might be done to get at the root causes behind U.S. companies taking their operations overseas. 

This post was originally published on Minnesota Public Radio on 3/31/16. 

CNBC: Alphabet’s CEO problem

CNBC Contributors Jeffrey Sonnenfeld of the Yale School of Management, and Bill George, former Medtronic chairman & CEO, talk about the leadership challenges facing Alphabet with the various companies in the corporate structure.


This article was originally posted to on 3/29/16.

CNBC: Squawk Alley Grading Yahoo’s Board

Bill George of Harvard Business School, and Jeffrey Sonnenfeld of Yale School of Management, discuss the proxy fight launched at Yahoo by Starboard Value and how the current and proposed boards could do.


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