These sees Bloomberg Business Week with Carol Messer and Tim Stenovic on Bloomberg Radio. All right, everybody, you might remember last month that we talked about that viral list that turned a Yale professor into an enemy of the Russian state. It is true. We're talking about Jeffrey Sonnenfeld, who has assigned grades to four companies and in the process highlighted the economic cost of sanctions that caught the attention of Russian officials put him on the Russian stop list, which
there's a few other familiar names on that list. Yeah, one might say he's in good company. First, Lady Joe Biden is on their center. Mitch McConnell, they're both on the list as well. We've got just Son and Felt with us right now. Senior Associate Dean for Leadership Studies, Lester Crown, Professor of Leadership Practice at the Yale School of Management. He joins us this afternoon via zoom from Branford, Connecticut. Good to have you with us, professor. Good to have
you back with us. I should say, Happy New Year. And you know I'm eager to hear your thoughts on this. Ever since the Business Business Week out this story in the magazine. I've been curious to you know, and I know you spoke to Business Week for it. Um what you think now of seeing your name on that list? Well, thank you, it's uh and it's good to be back with you. Tim and Carla. Thank you so much for the invitation, and happy New Year to you as well.
It's interesting I've gotten a huge amount of feedback because everybody reads Bloomberg, Bloomberg, business Week and and and follows Bloomberg. Uh so Uh, there's hardly a CEO I know that hasn't either sent a note or a call or a text message or something that sees it as a tremendous badge of honor. And the H that is all of them that are on the A, B, and C list, the D s in the FS. Actually, i've heard from
a number that are on the D list. The D list are people that they didn't pull out of Russia, but they have curtailed some future investing. Uh. The reason we came out, by the way, with the A, B, C, D and F isn't just because we're a schoolhouse and
that's all we know how to do. Is that there are some very artful public relations smoke screen some been that was leading to a lot of atmospherics about people who were saying nice things and not doing anything, and we thought we should divide out those who who actually physically pulled out permanently, who did so temporarily, who partially pulled out, who did some atmospherics, and then some who
aren't doing a darn thing. And that's that's how we divided them out into a through A through F. You are someone that is a go to voice when it comes to leadership and understanding what goes on in C suites, and you talk with a lot of leaders, they reach out to you as well, Jeff. But I do wonder was there something different about the Russian invasion in Ukraine that made it easier for companies to come out and
say we got to pull out of this. You know, very good question, Carrol, because of course CEOs are under a lot of pressure these days and getting involved and using their voice and social issues. If we were having this discussion two years ago, there's a stampede of enthusiasm for getting involved in voting rights or the presidential succession issues, and they've gotten some blowbacks in some states on positions on whether or not it's on environmental issues or reproductive
rights for women. And CEOs have still been using their voice on these various issues. However, on this one, there is no controversy, none whatsoever. In fact, I just addressed the attorneys general of all fifty states with their deputies and lieutenants there. Uh, and there was rousing support for this move state by state. Uh. And you can actually see that doing well is not antithetical to doing good.
There's no dispute between shareholders and other stakeholders. The more dramatically the companies pulled out, and our research shows this, the better they were rewarded in their in their financial performance. How is this different? Help me out here, though? When I think about what happened to Jamal Kasogi in you know, the journalist right um, that was killed assassinated? How is
this different from the mass killings in Syria? How is it different that companies can come out and speak out against what happened in terms of this Russian war in Ukraine versus those? What's different? Uh? Those are you know a great example? UM? I was worried after the killing
of Kashogi. Jamal Kashogi, the Washington Post columnist that was I think the US resident at that point working on a citizenship that there was condemnation, and there was a slight delay, and ultimately there was a mass exodus from that Davos in the desert. But Carol, you would say a year later they went back. Uh, and some of our top officials still went over in some companies. Uh. There is mass suffering around the world. We can take a look at an awful lot of hotspots where there's
a tremendous amount of injustice. And the question is, uh, it's like a hospital e er right now we have here at Yale New Haven Hospital, like around the country, we have a rising tide of respiratory viruses. We have the flu. We we of course have this new strain of covid uh, and we have car accidents. To weather here is horrible today. There are a lot of car accident and after a while, you know, and you are is gonna say, no, we don't want anymore. No, they
don't do that. They just decide on a triage basis. What Some things are worse than other things. The mass slaughter of of moms with their babies in their arms, lined up for bread. Uh, that's different. Bombing orphanages, bombing hospitals, the targeting civilians for this mass carnage, that kind of those kind of level of atrocities are are are worse than some horrible other types of injustices. But you're right, and we need to take moral positions when we can.
In this case, the operational risk, the financial risk on the reputation risk of staying in Russia was so high that the companies who have stayed have suffered. And we also have very little interest in being involved there. Some bring up China, for example, and that's a way more complicated because of the intertwined economics. Right now, Russia brings I mean, the moral decision is easy because the pragmatics are so easy. Russia brings nothing to the global marketplace
other than food and fuel. So, Jeff, is it then a financial decison? It it's it easy financial decision when it comes to Russia, but maybe not so much when it's Saudi Arabia or China, for instance. Uh, it's it's easier when when we take a look at Saudi Arabia, what we did see, it's targeted. Uh, some kicking and screaming and some enthusiastically, but every major fashion house pulled out of the Shinjin province over that really fine cotton.
Of course that's made there with the alleged uh detainment of you know, these awful conditions of the forced labor of the weaker minority population. That's pretty horrible. And and we've seen every fashion house pull out of there, and that's that's really fantastic cotton. And that's that's made a big difference. And uh, so we see that there are are targeted uh. Uh. You know, people ask, what about there's an invasion Taiwan? What about there isn't one yet.
If there is, we'll see. But right now we we we we've seen there is a an invasion of a sovereign nation, a democratic sovereign nation, uh and a mass slaughter with mass atrocities. That this is in a category by itself in the world right now out. But there may be other situations that come to come to the four where we need to get involved as well. But right now, uh, this is the one. If it doesn't look like we have fortitude here, there certainly will be others.
It's important to show that the world united as they are. Only forty of these companies have pulled out. That these three companies have pulled out. Our American there from every part of the world that pulled out. Fantastic, professor. What have you heard from the companies that haven't yet pulled
out yet? And I'm just going through their several versions of this list that you can look at on Yale's website, uh and then another one Yale Russian Business Retreat dot com as well for a sortable version of that list if our listeners and viewers want to check that out. But some are you know, business as usual, still operating in Russia, still selling products to Russia. What have you
heard from these companies? Well, it's surprising, you know. I've been tracking for forty five years now, looking at corporate social impact issues with the Business Roundtable, with the founding generation of the Business Roundtable, and that old and the first movers in this case aren't the usual one. The ones who pulled out early were big oil, big tech,
and professional service firms for various reasons. You can imagine that those three clusters are not usually on the front lines of social justice issues they were in this case. Those who are staying are a weird mix across industries. Places like international paper. What what are they doing there? Match group here, you give them an F grade match dot Com. What in the world did they They're trying to bring social harmony in to to the Soviet and
to Russia right now. I mean, there's some twisted belief that some had that these global brands. If you remember Tom Friedman in the New York Times, I hope he's not your best friend, but one of his most naive columns was a column that that was very widely circulated a few years ago on the Golden Arches rule of diplomacy that any two countries with the McDonald's would never
go to war with each other. And this led some US brands to think that this is a way of a refutation of old Soviet repression from celebrating that's that's crazy. But no, they shouldn't be there. Benetton shouldn't be there. Georgio Armanio is still there. It's Jeff, we gotta run uh. And of course that was Jeff's perspective and opinion. Ipertinately, when it comes to the New York Times calumnus, this is Bloomberg