Republicans on the Senate Banking Committee are set to discuss the rise of stakeholder capitalism and concerns about politicization of the financial system during a Wednesday hearing with Wall Street bank chiefs.
The much anticipated hearing will feature JPMorgan Chase CEO Jamie Dimon, Well Fargo’s Charles Scharf, Brian Moynihan of Bank of America, David Solomon of Goldman Sachs, Morgan Stanley’s James Gorman, and Jane Fraser of Citigroup.
It will be the first time the CEOs testify jointly before the committee since the 2008 financial crisis. They will also testify before the House Financial Services Committee on Thursday.
Republicans on the committee, who are led by Sen. Pat Toomey of Pennsylvania, are expected to raise concerns about what they say is the growth of “woke” capitalism and left-leaning activism in the corporate sphere. An example that will likely be invoked is the number of corporations that became publicly involved with opposing Georgia’s new voting law under pressure from liberal activist groups.
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Corporations’ opposition to the Georgia voting law was met with backlash from conservative political figures who said companies were exceeding the bounds of their mission. Former President Donald Trump called on his supporters to boycott Coca-Cola, among other companies, as did Republican Sen. Rand Paul of Kentucky. “Don’t go back to their products until they relent. We can play the game better than them,” Trump said in April.
Toomey told the Washington Examiner at the time that “many conservatives will inevitably choose to walk away from these businesses” involved in pushing back against the voting law. Toomey appeared poised to play a key role in the questioning on behalf of the GOP at Wednesday’s event.
“While the financial system has proven to be remarkably resilient, I worry that increasing political pressure could lead to distorting credit allocation which would jeopardize our continued prosperity and undermine public policy making in America,” Toomey said in a statement provided to the Washington Examiner.
Stakeholder capitalism is a concept that has gained steam in recent years and bucks the notion that the sole purpose of a corporation is to serve its shareholders and rather also focuses value on customers, employees, suppliers, and communities. Two years ago, Business Roundtable released a statement signed by 181 CEOs that attempted to redefine the purpose of a corporation and helped push a shift toward stakeholder capitalism.
The CEOs will likely be asked about stakeholder capitalism, which can be seen to prioritize social causes, such as environmentalism, over a company’s bottom line.
While the CEOs are set to feel the heat from Republicans about corporate politicization, they might experience the reverse from some liberal Democrats who feel that companies should be doing more to promote environmentalism and champion social causes such as wealth inequality.
The executives themselves will likely use the hearings, which are controlled by the Democratic majority, as a venue to tout their diversity, equity, and inclusion initiatives, according to Reuters.
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The CEOs are set to testify remotely at 10 a.m. The hearing before the banking committee will be broadcast live.
