What happened to Disney “stakeholders” in Florida?

Headquarters of the Walt Disney Company in Burbank, California.


Xavier Collin/Zuma Press

If there’s anything good to come out of the Walt Disney Company’s opposition to Florida’s new parental rights law, it may be in helping to expose the misleading promises of the “responsibility” movement. corporate social.

A Journal editorial notes the eminently reasonable language of Florida’s new law that Disney executives cannot abide by:

Classroom instruction by school personnel or third parties about sexual orientation or gender identity may not take place in kindergarten through grade 3 or in a manner that is not appropriate for age.

Disney’s intervention in Florida politics again highlights the problems that arise when companies stray from their central goal of creating long-term shareholder value. This column criticized the Business Roundtable’s 2019 decision to rewrite its principles. All but a handful of the CEOs of the large companies that make up the group agreed that year that a company should not simply focus on shareholder service, but rather be committed to serving a wider universe of ” vaguely defined stakeholders.

The rewrite of the Business Roundtable was a mistake, because serving the long-term interests of shareholders necessarily requires that executives treat non-owners fairly – to attract and retain a talented workforce, deliver good value to consumers, deal reasonably with suppliers and respect the laws and customs wherever a business operates. On the other hand, ‘stakeholders’ are often activists pursuing political agendas that they have been unable to persuade voters to endorse and for which they will not have to pay. There is no good reason to elevate their reproaches above the interests of others. Milton Friedman, who would go on to win the Nobel Prize in Economics, explained the flaws in such statements more than half a century ago:

What does it mean to say that the business leader has a “social responsibility” in his capacity as an entrepreneur? If this statement is not pure rhetoric, it must mean that he must act in a way that is not in the interest of his employers.

This brings us to Disney and its CEO Bob Chapek, who seems to have decided that certain “stakeholders” should drive corporate activism while other “stakeholders” should be ignored. Mr. Chapek’s signature appears on the current version of his Politics:

Statement on the object of a company

Americans deserve an economy that allows everyone to succeed through hard work and creativity and lead lives full of meaning and dignity. We believe that the free market system is the best way to generate good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunities for all.

Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services. Businesses manufacture and sell consumer products; manufacture equipment and vehicles; supporting national defence; growing and producing food; provide health care; generate and supply energy; and provide financial, communication and other services that underpin economic growth.

Although each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders.

The statement continues and specifically includes the following commitment:

Support the communities in which we work. We respect the members of our communities and protect the environment by adopting sustainable practices in all of our activities.

Time will tell how sustainable Disney’s business is in the long run. But how supportive and respectful is a company claiming to tell the Florida parent community that they must accept a state-sponsored gender identity instruction for six-year-olds?

In March, after the Parental Rights Bill passed the duly elected Florida Senate, Mr. Chapek published a statement on behalf of Disney suggesting it was a “challenge to fundamental human rights”.

This column must have missed the section of the Constitution guaranteeing government employees the right to lecture on sexuality in kindergarten classrooms.

Voters and shareholders beware, Mr. Chapek also announced that he would use Disney resources to promote his corporate social program nationwide:

Starting now, we’re increasing our support for advocacy groups to fight similar legislation in other states.

Doesn’t he even want to know what the “stakeholders” of these other states want for their children? Apparently not, and that should come as no surprise given the lack of respect he gives his Florida stakeholders.

So how are Disney shareholders benefiting from Mr. Chapek’s foray into cultural politics? Some may want to sell their shares and instead buy stock in a company where the CEO demonstrates corporate responsibility to the owners.


This column has been clarified to note that Mr. Chapek’s statement was published after the bill passed the Florida State Senate but before it was signed into law.


Mr. Freeman will host “WSJ at Large” this Friday at 7:30 p.m. EDT on the Fox Business Network. The program repeats at 9:30 a.m. and 11:00 a.m. EDT Saturday and Sunday.


James Freeman is the co-author of “The Cost: Trump, China, and American Renewal.”


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