When corporations take extreme positions, they destroy shareholder value by alienating large portions of their customers and investors.
This proposal provides Disney with an opportunity to move back to neutral.
From 2007 to present, Disney received a perfect score on the Human Rights Campaign (HRC)’s annual Corporate Equality Index (CEI),1
which
can only be attained by abiding by its partisan, divisive and increasingly radical criteria.2
Though HRC – which Disney has a paid partnership with3
– claims the CEI is just a “benchmarking tool on corporate policies… pertinent to
LGBT employees,”4
in reality, it functions like a social credit score for corporations. The threat of a bad score is wielded against corporations to
force them to do the political bidding of HRC and others (like GLSEN, the Trevor Project and GLAAD, which Disney also has paid partnerships
with5
) that seek to sow gender confusion in children, encourage irreversible surgical procedures on confused teens, effectively eliminate girls’ and
women’s sports and bathrooms, and roll back longstanding religious liberties.
Receiving a perfect score on the CEI can only mean that Disney espouses and funds those divisive positions. Because, as clearly outlined in the
CEI criteria, not advancing those efforts prevents companies from receiving a perfect score, as Disney continuously has.
Disney disastrously engaged in such activism when it inserted itself in the middle of a divisive public debate over the Parental Rights in Education
Act. And when a leaked video conference between Disney executives revealed that Disney has a “not-at-all-secret gay agenda” and was
“adding queerness” to children’s programming.6
Consequently, Disney stock fell 44% in 2022 – its worst performance in 50 years – amid putting this divisive agenda ahead of parental rights
and political neutrality.7
Since then, Disney doubled down on its mistakes – the Company again earned perfect scores on the CEI the following
years, which can only mean that Disney increased its partisan behavior to meet the CEI’s annually expanding criteria.
Other events made clear that shareholder value drops when companies engage is such partisanship. Bud Light’s North American revenue fell
$395 million8
and Target’s market cap fell over $15 billion amid backlash for similar actions.9
Thus, CEI participation should be reconsidered by Disney out of its fiduciary duty to shareholders.
Withdrawal from the CEI constitutes a corporate best practice because destroying shareholder value by engaging in the sort of divisiveness the
CEI mandates conflicts with applicable fiduciary duties.
Recently, Lowe’s, Ford, Jack Daniels, Harley Davidson, Tractor Supply and Toyota all ended CEI participation.10 Surely, Disney’s mistakes
influenced their decisions. Yet Disney itself remains committed to HRC’s divisive agenda as the stock price hasn’t recovered from its dive in
2022.11