Day 2 of SmartBrief's coverage from the Milken Institute Global Conference.
The public wants the Milken Global crowd to step up and lead
In conjunction with the Milken Institute Global Conference, Edelman released the results of its 2018 Trust Barometer. One of the key takeaways from the survey is that nearly two-thirds of respondents want CEOs to take the lead on confronting social challenges instead of sitting back and letting the government figure things out. Many of the business leaders have long been conditioned to remain silent on social issues so as to not upset their clients/customers. Will the Milken Global crowd answer the bell? Stay tuned…
This is only gonna hurt a little bit
Commerce Secretary Wilbur Ross did a bit of work this morning trying to assuage the fears of those who think trade tensions are going to derail the nice ride markets and the economy are enjoying. Ross conceded that the various trade spats that look like the will accompany the economic policies of President Donald Trump might hurt some Americans a little bit, but that they won’t usher in any kind of economic “Armageddon.”
Accenture boss sees things differently than Secretary Ross
It is probably fair to say that all of the executives here at Milken Global are paid to think and act positive while always preparing for the negative. Julie Sweet, CEO of Accenture North America, made comments today that pretty much sum up what almost everyone here at Milken Global is thinking: Life is good, but a trade war could change all of that.
The future of finance might look un-American
I must admit that halfway through this year’s Future of Finance session, I was concerned it was going to be like so many other sessions and go down the rabbit hole of how to recruit and retain talent. Yes, I know ping-pong tables are important to quants. Yes, I know hosting hack-a-thons and other programming competitions is a great way to identify/recruit talent. Yes, I know it is important to recruit talent at younger and younger ages. Yadda, yadda, yadda.
Thankfully, the conversation eventually turned to how cutting edge firms are actually using technology to change finance.
My favorite nugget was when Two Sigma Chief Data Strategist Ali-Milan Nekmouche floated the idea of using facial recognition technology to analyze CEO appearances on CNBC or Bloomberg TV. How cool would it be to know how confident a CEO is in the statements he or she is making on TV. Even better, wouldn’t it be great to know if they were probably lying?
The panel also touched on policy; with eye toward both fintech regulation and immigration policy. The panelists agreed that the US is behind other places like Singapore and the UK when it comes to regulators’ embrace (and promotion) of fintech. Coupled with an immigration policy that many agree invites foreigners to educate themselves at top schools in the US and then kicks them out of the country.
Most of the panel agreed that the combination of those two policy tactics could lead to a future of finance is one that is not dominated by US institutions.
Money and Guns
Be it guns, tobacco, human rights, the environment or whatever, activist investors often call on pension funds to divest their holdings in companies they view as being responsible for society’s ills. However, a pair of heavyweights in the pension world said today such divestment campaigns might be based more on wishful thinking that reality. Vicki Fuller from the New York State Common Retirement Fund and Chris Ailman from the California State Teachers’ Retirement System told the Milken Global audience they are more effective at bringing about changes in corporate behavior by staying invested in targeted companies.
While it is true that investors have a greater voice on things like corporate governance, environmental and social policies, I think divestment campaigns can still bring about change - depending on their scale and their goals.
If the goal of a divestment campaign is to put a company out of business, then obviously tons of pension funds heading for the exits can help make that happen. But if the goal is to change the behavior of a company that will stay in business no matter what, then Fuller and Ailman are probably right.
The funny thing about the talent hunt for non-profits
During this morning’s session on social impact investing, Milken Institute President and COO Richard Ditizio made an interesting comment on the challenge many nonprofits face when it comes to recruiting talent. I am paraphrasing here, but Ditizio said something like:
“It is bizarre that in the non-profit community you are often judged by how little you pay your talent. And yet, those same non-profits are often tasked with solving some of the most difficult challenges in society like disease.”
Ditizio is spot on. The world is teeming with people who would be stellar at making the world a better place, but are frightened to take the nonprofit plunge because they have bills to pay. Those are very real fears. The bigger question is: What can we do to change the compensation alchemy so that making the world a better place is a lucrative industry?
Michigan Gov. Rick Snyder had a rough day
The Milken Institute tried something a little different for the session on the gun debate in America and decided to make it a town hall. This was great for the attendees as they got to ask their own questions of the panelists. It was not so great for one of the panelists: Michigan Gov. Rick Snyder.
The decidedly pro-gun control audience took Snyder to task for constantly trying to change the topic to things like mental health and securing access to schools every time he took the mic. When Snyder tried to defend himself and say he wasn’t “deflecting” or changing the topic, he ended up going on a tangent about the sexual assault scandal that is rocking Michigan State University.
After the point was made by an audience member that perhaps the presence of more women in policy-making positions (and on the panel) would lead to different outcomes, Snyder was asked to name the women who hold such key positions in his administration. He spent the majority of time during his response talking about his wife, who holds no official power.
The fascinating thing about Sydner’s quick pivot to mental health is that his is a political party that despises big government. It is also a party that has made much hay in recent years by insisting the government keep its hand off of people’s health care. Yet, his solution to gun violence is to task the government with assessing people’s mental health.
Near the end of the session, Snyder conceded that gun-specific measures are part of the solution to gun violence, but that he wants to tackle all the other issues first. The only thing that could have made the session worse for Snyder would have been if someone asked him how his methodical approach to problem-solving is working out for the people of Flint, Mich.
As an aside, Frank Luntz moderated the panel and he was a bit brave in noting how today’s conversation about gun violence was taking place in a pavilion where violent video games had been playing on a loop right before the town hall commenced. And while the video games were halted when the session began, this statue remained:
More from the Milken Institute Global Conference
- Hedge funds see great days on the horizon.
- Are ETFs heroes or villains?
- Speaking of ETFs … State Street boss Jay Hooley shares his view.
- Junk bond dancers are still dancing.
Two Milken Global things from Quartz that I liked (Did you see what I did there?)
- Michael Milken said the US is misleading its students.
- Milken also said there should be an economic value placed on human health.
Beyond Milken Global