Why I Gave Up on Dow Chemical
[Below is a letter I sent, as a shareholder and frequent scientific collaborator with Dow, to CEO Andrew Liveris in April of this year. After six months, I thought I would share this in the absence of any reply or acknowledgment.]
Dear Mr. Liveris:
I am writing as a shareholder and admirer of Dow to express my dismay at the explicit anti-regulatory stance, and implicit anti-science stance, you are taking by your vocal support for Mr. Trump’s policies. By way of brief background, I have had productive interactions with Dow scientists and lobbyists dating back to the late 1980s, when I was a Fellow at Resources for the Future and served on several working groups with some of your now-retired scientists. From 1995 to 2003, I was a senior executive at OSHA (chief scientist and later a Regional Administrator), and came to greatly admire Dow’s commitment to employee health and safety. As recently as last spring, I was invited to lecture to your Global Crisis Communications Network, about my research on risk communication and perception.
I could not own individual stock issues when I was in the federal service, but I purchased a small quantity (500 shares) of Dow after I left, as part of a portfolio I believed was socially responsible. My dismay caused me to sell those shares several weeks ago, after the meeting where Mr. Trump signed his Executive Order on regulatory “reform” and handed you the pen.
As one of the country’s leading experts in quantitative risk assessment and cost-benefit decision-making, I firmly believe that we have a well-developed system of regulatory analysis in this country that ensures these rules create social benefits far in excess of their economic costs; that they truly are part of “those wise restraints that make us free.” I don’t expect those who (at least initially) bear much of those costs to be happy about complying with them (despite their having created the very externalities that make regulation necessary), but I do — or at least I did — expect two things from a company like Dow. First, I expect industry leaders to work to make rules better, without rancor and without complaining about how “burdensome” they are; this is an insult to the citizens and workers who bear the risks from your useful products. Second, I expect industry leaders to act in their shareholders’ best interest — and so it is depressing to see a company that I know is exceeding OSHA standards (and I assume is also exceeding EPA standards) not to realize that from a narrow strategic point of view, it benefits the company that there are rules that their competitors must expend monies to comply with.
The Executive Order that requires two rules be scrapped for every one promulgated is profoundly illogical — these rules create net social welfare, and so “one-in-two-out” is like a manufacturer declaring that “we make a profit on every unit, so we need to sell fewer and fewer of them!” And, of course, in the past few days we have seen a budget document that takes denial of basic scientific findings and translates them into punitive cuts in EPA and OSHA, to the detriment of consumers and producers alike.
I do not expect companies I invest in to see the world only through the narcissistic lens of whether the current political leadership is “the most pro-business since the Founding Fathers,” as you stated. You should, I respectfully suggest, seek a government that is pro-science and pro-welfare, in the broad sense of seeking to create benefits that exceed harms whenever possible. In particular (see below), to fall for the hoax that regulations are substantial “job-killers” is bad for business as well as bad for public health and the environment.
I realize that to truly “divest” from companies I can’t abide, I would have trouble investing or shopping anywhere. I’m sure there are 100 more egregious stances taken every day by other CEOs. But as an erstwhile admirer of Dow, your words and your enthusiasm for the current slash-and-burn policy troubled me greatly.
I would be happy to discuss my concerns with you or anyone on your staff. I appreciate your allowing me to vent my dismay.
Adam M. Finkel, Sc.D.