https://www.wsj.com/articles/how-to-answer-the-trap-question-11617559915
Being a CEO is hard. You work like a beast of burden to build your company, hire smart workers and delight customers so they’ll buy your products and you can show great returns to please investors. Then, no matter how successful you are, you still get asked social-justice “trap questions” like “What are you doing about inclusion and equity?” Just by answering, you’re assumed guilty. Some of these things might be important, but more important than growing the company to create those inclusive jobs in the first place?
This year’s Stanford Institute for Economic Policy Research Summit included a fireside chat with Microsoft CEO Satya Nadella. Unlike his clipped predecessor, Mr. Nadella turned the company around into a cloud colossus. Former Microsoftie Jeff Raikes, like George Stephanopoulos interviewing Nancy Pelosi, asked the softball questions.
But these are Seattle-soaked folks, so Mr. Raikes had to ask the unanswerable trap question: “Let’s talk a little bit more about equity. Before the pandemic, the world was facing big challenges: climate change, structural racism, economic insecurity, wealth inequality and more.” Oh boy, here we go. “What is the responsibility of the corporations,” he asked, “particularly the underlying connection to racial justice in the U.S. and elsewhere?”
Mr. Nadella isn’t CEO of a trillion-dollar company for nothing. Coolly and calmly, he explained that “the social purpose of a company is to find profitable solutions to the challenges of people and planet,” crediting Oxford economist Colin Mayer for the definition. “Driving broad economic growth is perhaps the biggest thing that a company can do,” Mr. Nadella added. “In order to have the pie distributed evenly, the pie should first grow.” Left unsaid is the pie should never stop growing.
Mr. Nadella’s comeback was the best misdirect to the trap question I’ve ever heard. Every CEO should pay attention. Mr. Mayer’s definition of corporate purpose as finding “profitable solutions” is—shh, don’t give it away—basically the same as Milton Friedman’s “the social responsibility of business is to increase profits,” except with the crowd-pleasing word “planet” tacked on. The definition was even part of the agenda of the World Economic Forum, making it suitable for John Kerryish globalists everywhere. Write it with a Sharpie inside every CEO’s eyelids for future reference. The answer is brilliant.
Here’s a different take. Years ago, I was on an investor panel with Jeff Ubben of ValueAct Capital.