CEO Bob Iger won a landslide victory at Wednesday’s annual shareholder meeting while shareholder activist Nelson Peltz tries to wrest victory from the brink of defeat in his proxy battle with Disney. I made sure. Shareholder support for Disney board candidates and shareholder rejection of efforts by Peltz and former Marvel Chairman Ike Perlmutter to secure board seats for Peltz and former Disney Chief Financial Officer Jay Laslo; It’s a win for impact investors and those who believe companies must answer multiple questions. Person concerned.
From the beginning, Peltz and Perlmutter portrayed this proxy war as an epic battle in the culture wars, an underdog story in which two billionaire Davids battle a “woke” Goliath. Peltz played a grumpy character who complains about movies with too many women and black people. Mr. Perlmutter went down that path, trying to veto such projects at Marvel before he was fired last year.
Together, they positioned themselves as champions of shareholders who evaluate good governance solely by stock price. (Additional credit to Elon Musk, who backed Peltz at the last minute and promised to buy Disney stock if Peltz won. Potentially chilling given his strategy on Twitter/X. (That’s the prediction. Shareholder activist Bill Ackman also played a walk-on role, accusing Disney of dirty tricks.)
While Mr. Iger is not above reproach when it comes to governance (Exhibit A is succession planning), he understands that Disney must also be responsive to its employees, customers, vendors and other stakeholders. There is. Disney’s filings show that more than a third of the company’s stock is held by individual investors, many of whom may have financial interests in the company. This means diversity, inclusion and good citizenship are key to achieving long-term growth. As Yale University’s Jeffrey Sonnenfeld and Steven Tian point out, Mr. Peltz’s talent for inflating stock prices through proxy fights has historically not increased the long-term value of stocks.
Adding value is the transformational leadership that Iger has demonstrated throughout his career. That means staying ahead of technology and consumer trends and being the kind of company people want to work for. In this polarized climate, it’s difficult to speak out on issues like abortion and anti-LGBTQ+ laws. Disney, a major employer in Florida and a company that has targeted its products to a diverse customer base, has taken a public stance after Florida Governor Ron DeSantis signed the “Don’t Say I’m Gay” bill. This created two problems. This year’s battle finally came to a close last week.
Disney, an $89 billion-a-year behemoth, can afford to take on deep-pocketed warriors like Mr. Peltz and Mr. DeSantis in a way that few companies can. The company said it spent nearly $40 million just to protect its shareholders from Mr. Peltz.
For leadership consultant Bill Shanninger, that’s money well spent. “For the Disney brand and its people, they have to be on the right side of history,” said Scott, who led the global talent practice at McKinsey before becoming a senior partner at Modern Executive Solutions. Mr. Shanninger says. “In the long run, you can win as an employer and as a company by committing to diversity.”
Mr. Shanninger advises leaders of large public companies to fully protect their commitment to ESG practices. In a polarized political environment, the key is to do it differently. “Share risk with the board. Engage the lead independent director in the conversation about, ‘What do we stand for?’ Have those conversations with employees and large investors, and Reiterate your core values in areas where we don’t.” You don’t need to yell at someone who is weaponizing politics, left or right, to bring you down. And accept that being one of the biggest kids on the playground means you have a responsibility to stand up for those who can’t.
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diane brady
Diane.brady@fortune.com
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