Brian Moynihan: ‘What Does Society Want From We CEOs?’

Remarks by Brian Moynihan, Chairman and CEO of Bank of America at our 2020 CEO of the Year gala, as delivered via video, Tuesday, Oct. 20, 2020. Go to Full Coverage of the Event > 

Thanks to all of you. Thank you, Arne. Thank you to CEO magazine and to the CEOs on the selection committee. To be honored by one’s peers is humbling.  And I am humbled tonight.

I want to start off by thanking my Bank of America teammates for all the work they’ve done during the pandemic. They have delivered for our customers, our clients and our communities. And they have done it extremely well.

As mentioned by Arne earlier, I want to give a special shout out to our teammates who work every day in our branches. From the day the crisis hit, they’ve been out there, making sure the economy runs, making sure all of you – while we were all in work from home mode – have the ability to conduct your financial affairs. And they’ve done a great job.

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I want to shift to tonight just for a few seconds. I want to start by thanking my family.  Sue, my wife, my son Chris and his wife Kat, Mary and Caroline, my daughters.  They help me do what I do. They help me do it well. They keep me grounded. And they make it possible for me to do what I do.

I also want to thank my Bank of America teammates and the Board of Directors – including Arnold who you saw earlier. I would not be here without them, and that is a given.  My management team and all my 200,000-plus teammates deserve this award not me, and I accept it tonight on their behalf.

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A year and a half ago, there was a time at a hearing in the House Financial Services Committee, where I was sitting with 7 bank CEOs in a line, and we were asked the question, ‘Are you a capitalist?’

It seemed an unusual question to ask 8 CEOs of the biggest profit-making banks in the world.

And of course we all answered yes.

But I often think about—what was behind the question?

What was behind that question was a worry that capitalism is not treating all equitably or sharing its profits among workers and society in an appropriate way. Or that capitalism isn’t helping address climate change. Or that capitalism is failing to provide economic mobility for all races and genders equitably.

But that inquiry doesn’t come just from congressmen, as a matter of fact it came from the Pope recently. It comes from academics. Why it even comes from people who are great capitalists: the “killer B’s” as I call them.

Our friend Bono who says capitalism needs to be tamed.

Warren Buffett – one of the great capitalists of all times – talks about how the capitalist system is the best but it has fallout, and we have to help those people who fall out from it. Recognizing the needs.

Marc Benioff – who runs Salesforce and, as many of you know, is a great CEO and created a great company – often talks about the need to change capitalism and has committed his business model to make that happen.

Michael Bloomberg, the great Mayor of New York and also running Bloomberg, talks about how capitalism may have failed the process of climate change, and how we need to do it.

This type questioning is the type of questioning that we all tried to clarify in The Business Roundtable’s statement of purpose one year ago.

It’s also the kind of questioning gave rise to the International Business Council declaration in 2017 about driving sustainable capitalism.  In fact, it gave rise to the new Davos manifesto last winter.

And where does that leave us? We as CEO’s, the executive leaders of our companies, have a duty. That duty is to drive the genius of the ‘and.’ To deliver profits and purpose.

This is not a new concept – Jim Collins wrote about it in 1990. Klaus Schwab founded the World Economic Forum on it 50 years ago. We have to deliver profits and purpose.

To deliver, and to prove that delivery, we have to have two things. First, we need to know what society wants from capitalism. Second, we have to know how to measure the progress. And we have to be able to show that progress to society so they can get behind capitalism’s efforts, rather than challenge them.

So what does society want from we CEO’s, we capitalists?

Well, we really do know that. In 2015, at the United Nations annual meeting, 193 countries signed a pledge to drive the sustainable development goals (the SDG’s).  Those goals are specifically what society defines as sustainable development. That tells us what society wants: measurable progress on the SDG’s.

So how do we hold capitalism and ourselves as CEOs and our companies accountable for delivering them?

We have to have a plan at every company, we have to measure that plan and we have to report out on that plan so we can be held accountable.

That is the work my colleague CEOs of the World Economic Forum, and the International Business Council inside the forum, have done with our big 4 accounting colleagues.  We have surveyed the multiple regimes of measurement that exist, we have converged upon a series of measurements that can measure stakeholder capitalism.

One of the questions I get asked when I talk about these matters is, ‘why does capitalism have to do this?’ ‘Why does capitalism have to deliver the SDGs and the progress?’ Well it’s simple: Capitalism has the money.  Capitalism has the talent. Capitalism has the innovation behind it. And, yes, it has a profit motive.

Some ask, ‘Why can’t governments or non-profits or NGO’s drive it’?

Well they all have a key role in what’s going on, but they just don’t have enough money. The SDG’s alone take $6 trillion per year to make happen. Governments are running deficits, especially in the COVID crisis era.

Charity is about $1 trillion per year and is a wonderful thing, but can’t fund the SDGs. Endowments have a trillion and a half dollars of assets in them. But again, you could empty them and still not fund progress in the SDGs for more than a single year.

So it takes capitalism and it takes the companies to drive it and lead it.

So how does a CEO do this?

I can’t speak for all of you but I can speak for what we do at Bank of America.

We at Bank of America bring our $2.8 trillion balance sheet to the task. We bring our $54 billion expense base to the task. We bring our $245 billion of equity to the task. We bring the trillions of dollars of capital – which was mentioned earlier – raising for our clients to the task.

And, we bring our $3 trillion in investment assets to the task.

Some examples:

• Our company is carbon neutral this year.
• Another example is our charity, our philanthropy and the volunteering our teammates do.
• Another example is our human resources practices – the pillar of ‘people’ in the SDGs.
• A minimum starting wage of 20 dollars an hour or $41 thousand per year.
• A strong and progressive benefits for all our teammates.
• Giving our teammates reskilling – to help train them from one job to another.
• Our diversity and inclusion efforts, which continue to drive better and better representation and inclusiveness in our company.
• We also have to do it in our client facing capabilities – because that’s what makes it sustainable.
• On the environment, we have a 10-year $300B commitment to help finance the transition to a low-carbon, sustainable economy.
• We’re the largest underwriter of green bonds and we have helped companies raise $40 billion that they have earmarked to help their move to carbon neutrality, and to help them fund over than 200 environmental projects.
• We are helping our investors find opportunities to drive impact across the SDG’s – to have the ability to impact racial and social justice and economic mobility, including our recent $2 billion Equality Progress Sustainability Bond.
• And we are doing it by our $1 billion program for racial equality and economic opportunity – rolling out in all our markets across the country.
• And we do it with our research and our investment advice – shepherding client demand for ESG products and investing, and helping them fulfil their desire to put their money with the companies that are making progress.

In the end, we commit at Bank of America our whole business operations to our efforts.  And with that, we can make progress, and, by the way, these business activities lend themselves to a better brand, more client favorability, a better place for our teammates to work, and better profits. That is how we deliver profits and purpose.

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So in closing, I want to thank all of you for the recognition. I want to thank my family again.  And I want to thank my Bank of America teammates and my Board of Directors. I want to thank the selection committee for bestowing on me this honor.

But as I think about it, in closing… At that Congressional hearing was a personal question – How can you be a capitalist?  How can you be a CEO?

It is a question I am used to getting asked.  I grew up in a non-business environment – my family was all about science.

I grew up in a small town with no large company headquarters. I grew up wanting to be a criminal lawyer like an F. Lee Bailey or Perry Mason. I was a history major and became a lawyer.

To this day, I get asked by those who know me the longest, ‘How can you be a CEO?’

It’s not a question they’re asking about ‘why did they choose you?’ or ‘were you competent?’, it’s a question about ‘I never knew you cared about these things.’

The answer is: I am a CEO because companies can help drive shareholder value and societal value.

Companies can deliver on the genius of the ‘and’.

I am honored to be a CEO, and I am most honored to be the CEO of Bank of America, the great company I have the honor to lead.

And I am honored to receive this award tonight on behalf of those 211,000 teammates.  Thank you.