The list of top business leaders withdrawing from an investment conference in Saudi Arabia this month grew longer by the hour in recent days, as an international uproar grew over the disappearance and alleged killing of dissident journalist Jamal Khashoggi. From JPMorgan Chase CEO Jamie Dimon to Blackstone Group head Stephen Schwarzman and Mastercard CEO Ajay Banga, the ranks are growing of top executives who will not attend the Future Investment Initiative, an event in Riyadh in late October that is known as “Davos in the Desert.”
Those who study the growing involvement of CEOs in political and cultural firestorms said the withdrawals, while different in some respects, were part of a pattern of engagement by top executives. Some made comparisons to how CEOs have stepped in on other topics -- from gun control to climate change to the call to ban transgender members of the military -- drawing analogies between the moral issues at stake.
“Now that Jamie Dimon has spoken up, it might be a tipping point like we had with Ken Frazier,” said Leslie Gaines-Ross, the chief reputation strategist at Weber Shandwick, the global public relations firm. The comparison to Frazier, the African American chief executive of Merck who withdrew from Trump’s manufacturing council last year after the president’s response to a rally in Charlottesville, Va., led by white supremacist groups, reflects Dimon’s status as a leader in the financial industry, which does significant business with the country of Saudi Arabia.
Gaines-Ross also compared it to the responses of CEOs in the wake of the school shooting in Parkland, Fla., or the separation of families at the U.S.-Mexico border, which she said showed "CEOs are taking some risk and taking action where government may be more hesitant,” even on issues not directly tied to business but that reflect “moral, global values.”
Aaron Chatterji, a professor at Duke University’s Fuqua School of Business who studies corporate activism, said that unlike domestic issues like gun control or LGBTQ rights, companies may not have the kind of polling or awareness of consumer or employee sentiment that could help in responding to such an issue.
The timing just weeks before the conference "forced a decision on something that a lot of people probably had not thought much about before,” Chatterji said.
The exodus from the Saudi conference began last week. Virgin Group founder Richard Branson said he was suspending two directorships related to Saudi tourism projects. AOL co-founder and tech investor Steve Case tweeted that he was putting his plans to attend on hold. Sam Altman, the CEO of statup incubator Y Combinator, said he was suspending his involvement advising a mega-cities project in Saudi Arabia “until the facts regarding Jamal Khashoggi’s disappearance are known.” And Dara Khosrowshahi, the CEO of Uber, in which Saudi Arabia’s sovereign wealth fund placed a $3.5 billion stake, said he was “very troubled” about the reports regarding Khashoggi and would not attend the conference “unless a substantially different set of facts emerges.”
For businesses that withdraw, there are certainly risks of denting their relationship with the wealthy sovereign investor -- the finance minister of Bahrain, an ally of Saudi Arabia, called for a boycott of Uber, for instance, and many have business ties to the kingdom. But the risk of being seen as standing by the Saudi government is also very high, according to reputation experts. The conference has been described as part of Crown Prince Mohammed bin Salman’s effort to modernize the kingdom’s economy and promote projects designed to attract foreign investment.
“This conference is a pure reputation conference -- it’s a conference put on by Saudi Arabia for the sake of the reputation of Saudi Arabia,” said Anthony Johndrow, who leads a reputation advisory firm in New York. The CEOs "lent their names to this event. When they have this massive reputation question hanging over their head, that becomes an unacceptable bargain until that’s resolved.”
With much unknown, Johndrow said CEO involvement is really more about distancing themselves until the situation is resolved than taking a principled or moral stand. (President Trump spoke with Saudi King Salman on Monday, who he said firmly denied knowledge of Khashoggi’s disappearance, while Turkish officials believe he was killed and dismembered inside the Saudi consulate in Istanbul, The Post reported. On Monday, Trump also floated that it “could have been rogue killers.”)
If pictures were to emerge, Johndrow said, of a CEO "standing next to the crown prince, and it turns out he is guilty of this and it’s as bad as everyone fears it is, that picture of the conference becomes a rallying cry,” he said.
Indeed, many of those who have withdrawn from the conference have said only that they will not be attending, rather than making statements or posting on Twitter about values like freedom of speech or human rights. For instance, according to reports, a spokesman for Dimon declined to say why JPMorgan Chase’s CEO would not be attending. A spokeswoman for Mastercard also declined to provide any further statement other than that Banga will not be attending.
“Until this is clear cut, they’re not going to publicly say anything about what’s going on," Johndrow said. "They’re certainly not going to put themselves out there.”