Brian Armstrong, co-founder and CEO of cryptocurrency exchange Coinbase, became the talk of Silicon Valley when he put his foot down on embracing social justice as part of his company’s mission.
Employees should be “laser-focused” on the company’s mission — to create an open financial system for the world,” Armstrong said in a Sept. 27 blog post.
“We are a for-profit business,” Armstrong wrote. “We don’t engage here when (broad social issues) are unrelated to our core mission, because we believe impact only comes with focus.”
Armstrong said the company would provide employees with up to six months of severance in exit packages to leave the company if they don’t “feel comfortable with the new direction,” according to an internal company email seen by The Block.
The message was clear, Coindesk reported. Armstrong expects employees to keep activism out of the workplace.
In the blog post, Armstrong acknowledged that his approach may be controversial, that many people may not agree, and that some employees may resign.
“We are an intense culture and we are an apolitical culture,” Armstrong wrote. “… With a strong, united culture, we can build a company that changes the world.”
Many companies and business groups embrace social justice as part of their missions. Coinbase is moving in the other direction, New York Times reported.
Stakeholder capitalism, a popular management theory in the 1950s and ’60s, focused on the needs of all stakeholders in a company, not just shareholders. The concept was moving toward a comeback. It gained ground in the face of rising social challenges such as rising inequality “after weaponized financial instruments brought down the economy in 2008,” Harvard Business Review reported in January.
“Increasingly, there’s a sense among business leaders that the prevailing ideology of putting shareholders above everyone else — which has reigned for the past 40 years — needs a serious update,” HBR reported.
In 2019, 181 members of a CEO’s club — the Business Roundtable — agreed to broaden “their traditional obsession with the bottom line to include societal concerns.”
Then the coronavirus pandemic hit and all bets were off.
A study financed by the Ford Foundation concluded that “since the pandemic’s inception, the Business Roundtable statement ‘has failed to deliver fundamental shifts in corporate purpose in a moment of grave crisis when enlightened purpose should be paramount,'” New York Times reported.
Less than two weeks after George Floyd’s May 25 murder by Minneapolis police, Armstrong tweeted, “I want to unequivocally say that Black Lives Matter.”
Armstrong continued in the June 4 Twitter thread, “After speaking with our Black employees this week, it became clear to me how much pain they are in during this moment. I feel an obligation to support all employees at Coinbase, especially our Black employees right now, who are experiencing something I will never fully understand
So I’ve decided to speak up. It’s a shame that this even needs to be said in this day and age, but racism, police brutality, and unequal justice are unequivocally wrong, and we need to all work to eliminate them from society.”
In his Sept. 27 blog, Armstrong encouraged employees to put the company goals ahead of its teams or individual goals.
“With this clarity, hopefully everyone can make an informed decision and we can move forward as #OneCoinbase,” Armstrong wrote. “If you want to work at a company like this, please check out our careers page.”
On twitter, Armstrong received some support for the idea that that business leaders should remove unnecessary distractions such as activism and discussions about politics from the workplace.
“Yet again, @brian_armstrong leads the way. I predict most successful companies will follow Coinbase’s lead. If only because those who don’t are less likely to succeed” tweeted Paul Graham, co-founder of Y Combinator startup accelerator and seed capital firm.
“It’s important to recognize when inaction has a more positive net outcome than taking action. Brilliant leadership by @brian_armstrong”, Pablo Casilimas tweeted.
Not everyone agreed.
Listen to GHOGH with Jamarlin Martin | Episode 73: Jamarlin Martin Jamarlin makes the case for why this is a multi-factor rebellion vs. just protests about George Floyd. He discusses the Democratic Party’s sneaky relationship with the police in cities and states under Dem control, and why Joe Biden is a cop and the Steve Jobs of mass incarceration.
“It’s controversial for good reason, because some of his employees don’t have the luxury or privilege to ignore (even at work) what’s happening in this country politically. This policy harms them most, and he points them to the door. It’s a lazy attempt at pre-silencing dissent,” Eric @EricNau tweeted.
“Sums up the garble Brian Armstrong posted. He sounds like an vested banker visiting a slave plantation in 1850s assessing the exploitive inhumane life conditions that was being threaten by slave revolts, but doesn’t recognize the blood stains on the cotton & money. Bye Coinbase!” Aubrey Muhammad tweeted.
“This letter is the opposite of good leadership,” Martin Muehl tweeted.
Read more: Coinbase Cryptocurrency Exchange Plans For Stock Market Listing, Could Be A First For The U.S.
