Debate today. We leave time and every session for q a. We we ask you to challenge our guest today. Will really here for you. I remind her that representatives of this year news counsel account for well over 2 trillion in revenue. 9 million jobs globally. Very influential boy sprite will proud to have you here today. Once again we cannot be here that went out the support of our sponsors. We want to thank those again. Flex jet, honeywell, nec, ntt, samhsa, suite chemicals. We sit we appreciate your support veryup much. We offer some time to network and enjoy getting to know each other this morning. I like to introduce now our host for the day, my colleague and associate editor, he will walk you through the logistics and get us going. [applause]. Wall coming and everybody. Its great to see people here from years past. This are 12 counsel. As all of you know, the day has mass at this very interactive. If you have not downloaded the app for the session, please do so and heres how to also get into her full of questions as you know one of the things that theyre going to be used for is will going to be asking your opinion through the course of the day on the issues that are being presented on stage. Want to know what you think. So one way for that to happen is for you tore express your opinis through the app and through the polling questions. There is any of you who do not already download it and sort of test target at registration. There are folks outside who canc help you do so. In addition to polling questions on theon app, be able to receive Program Updates and check your schedule, and ask questions anonymously if you wish. If you want to raise your hand, and identify yourself and you consider three app. Ill get it on the ipad in alaska for you. A reminder that we will cover this pretty extensive it extensively. Poere reporters will be tweeting out our thinking on what is being settled stage, and if you want to join the conversation, please do. Hashtag w state ceo council. We want to hear your views as well. What happens when that begins to happen . How do you make that decision . What do you do interacting with the board and what stakeholders are you really representing . Would you take a position on a social issue and should you . To discuss this incoming director of the complements additional investors joe kaiser ceo of siemens and they will be interviewed by my colleague jamie heller Business Editor of the wall street journal. [applause] thank you so much for being here. When we are talking about whats good for business and whats good for society often its not just that hard. Customers and your employees are good for your profit but what about when its not joe . Can you walk us through situation where you had to make a tough call and how it worked out . Good morning first of all everybody. How much time do we have because this this is a country where every morning when iev get up this is what medicine is all about. You have this interest. Youve got priorities so maybe i will give you one from the political say one from the social side. Our generation is quite complicated and open for the future. In germany theres the asian part of germany in the western part of germany. The eastern part of germany youre miles away from poland 200 people. Its the biggest employer in a small city typically 1200 employees. Somebody once invested in the name of the town. Five miles after that there is poland which has won six of the labor cost and is a the country you put the free trade on the board and theres polish free trade. They close down this factory the lights would have gone out on the 40,000 small towns. That town happens to have 40 , 40 of rightwing voters which we dont really like. You look at the numbers and you say such is live. Ive looked at the more social consequences and 200 Million Euros is not that much and if you go 60 segments in three years. When i come back you get it done. Youre comfortable. You have got more than 100 billion dollar revenues so every working day you make about 40 million so why would i care about a half days were . But you need to look at things which are eyes connected and i decided to give them a chance. How did that work out . Well are our dippers are responsible for a small turbine business which you typically have a few do that type of Power Generation all over the world on their own. In the end is that good or bad . I told them when i come back we will see how you are doing and you will be fine. I dont expect a 40 margin which we have for the company but i dont expect it to cost near the capital. In the way you are taking it on the channel little for the bottom line because itsn not really where you want to be. Bobby do is to give people a chance and they give people a prospective and they do what i think any companies ought to do. There part of society which cares. The risk profile is manageable. Youre not going to make it in two years we need to cut to the chase. I think its within the area which we need to do more but not losing the focus on your margin. Amy you represent investors so the era scenario light that benefits you . I think t obviously in thank you for having me and its a pleasure to be here. Ceos have to take the consideration of a range of stakeholders and thats just a given. But i think theres a difference in the u. S. I think that to go back stay cooler versus shareholder longterm shareholderrs value ad by the way the Business Roundtable in august changed the statement on the mission of the corporation to be focused on stakeholders and shareholders being one. Thats good for business and we could put up an image of that so people can catch up with what it says. I think there are various reasons why ceos find out. Some find it because it reflected frankly with a think garrity doing but not getting enough credit for. Of course ceos dont operate in a vacuum. They have to weigh the interest of suppliers and customers and employees along with shareholders and i would add bondholders and regulators as well. Jamie dimon called my boss after i criticized the statement said the problem is ceos are not medicating adequately what they doing. Eady they do create by you for society. But i think some ceos do want to rain and shareholders and you want to get get give more weight to other stakeholders and particularly with a view towards being concerned about too much shortterm and with a concern about hedge fund activist nipping at their heels at times but this is roundtable for one noticeably last year earlier this year urged ceos to move away from providing Quarterly Earnings guidance because of concerns about too much shorttermism. Youre an advocate for shareholders. Is that at the end of the day what is the priority for ceo . It thats where we part company with the rg. There isnt as much difference as he think that what we thought was missing words do matter and at the end of the day they put shareholders last. They refer to shareholders as providers of capitol rather than owners of the company andrs whie winning the interested different stakeholders matters at the end of the day there has to be an organizing principle in northstar if you wille and we think that needs to be delivering value for the longterm sustainable value shareholder value for the longterm. Make it like to go to the poll and see what our audience sees on this debate which will be asking you. Speaking out on social issues is this part of the ceos job . Lets see what the audience is thinking. Not even in debate. Everyone is on board. Then joe you are one of the leaders in this area. Can you talkou about how you dot you do it. You wake up in the morning and its the kind of thing that weighs on you. If you are going to tweet about the presidency of the United States as you have for other issues now evening out a little do you talk to a pr person before you speak out pecks do you talk to your general counsel where the board specs can you tell us how. We come back to that method of shareholder versus stakeholder but it must not be a contradiction. Many people confuse it and sayan either a stakeholder shareholder but they are not. Shareholders are part ofsa stakeholders. So they have a responsibility there and i tell my people all the time dont come back to me with staff. First i wanted to be my peers. So i have a chief of staff and people worry about what they can do to society. You can help the weak ones. If youre weak yourselves thats against the rules. Dont worry about other peoples problems. Youve got to be strong. Youve got to be preventative and innovative. Is that even realistic tickets even if you are incumbent industry dont you have to be competitive all the time and can you relax relax and start thinking about socialism . Of course you can. Days and this is not just about the United States. About development early. In the old days there were stakeholders. Then you have your employees labor and customers. There was no contradiction because without customers there is no shareholder. So customers typical labor against capitol. In the new days now theres another stakeholder. People feel engaged and they go and tweet in the go on social media v. On to have a say whats happening. They need to address that. People want to know. I myself and i was going out and saying its not going to be led into a harbor for people or just about to die. Thats not right. Youve got to find a solution for that. So i said hey people get punished when they heard other people. Lets see if youun feel that strong as a role is a ceo to make her take a leadership role on an issue like there. You can see the numbers there twothirds and one third. I think we are seeing ceos speak out more on societal issues and we did 10 or 20 years ago in this country partly because of frustration with the paralysis here that the government isnt stepping in to do what thisth really governmens job and second is the workforce. Younger workers and their customers want to work for do business with companies that share their values. And the need for a Diverse Workforce means ceos are feeling comfortable speaking out perhaps on issues relating to immigration and lgbtq issues and in terms of big problems Climate Change which is very real to a lot of companies Climate Change which is difficult and transitional. But every time you speak out we have had company speaking out on gun issues and gun violence. You risk getting slammed because some of your employees disagree. The president ial tweet storm has this thing about it over the last couple years. Its not without risk. How do you think about the risk when you are actually going to make these decisions and youre going to icu or an linkedin and twitter a lot in taking on the presidency of the United States comments of racism. I haveenen to. You shouldnt be surprised if. You should read what he said. Its a view of what it could be. I didnt say the president was a racist and i would never do this because its not my business of the american people. This is respect for the most powerful office in the world. What i said im really concerned if the most powerful office in the world is associated with racism having a crowd behind him which was saying get them home. Maybe im overreacting is a chairman because of our history. People at that time said similar things. Maybe this is a bit too much of an overreaction. The United States of america is the most powerful nation in the world. This is the whole world order has organized because of the United States of america. Germany would not exist the way it exists. Its really important. The russians came to the czech republic. There was a village about 10 miles away from the coast. This was a really bad cold war and there was a victory here. I was really worried and my grandmother who is basically racing me because my mom used to take your family and my grandmother said the americans will help us us. They will help us. So this is how i was growing up. This country here leads the bringing the been world to a civilized sort of place. This country leads the world in the civilized sort of place. You need to understand that this is how we look at United States ofrm america. And youd see this type of stuff you had that before and it didnt end well so this is also motivation. This whole social ceo and what have you its not just about value work ego. Its also about interest. Ill give you two things. The first one is you have young talent in countries in the world there are people if you want them in your Company Unique to value the company. Its not about the got the greatest mri in the world are the most of gas turbine combine with 78 efficiency. I dont care. They say hey we are saving lives. We couldld save 585,000 metric tons of co2. Youve look at that and say oh wow so this is really trysting. People want to know and also i get the face like okay im also an employee of my company and on my company although i at like i would. People say how can you criticize the chairman. How the hell do you do that pecks they also might be buying some siemens stuff. We have got several hundred thousand shareholders so ask my people. On the social media platform should i get engaged in social matters and get engaged in political things and companies . Guess how many said they wanted to invest in education . Just take a guess. Dont get all socialists here. Still it capitalist democratic country in germany. It looks different but its still okay. 89 said hey i want to know what my ceo thinks. Where did you ask that . In an internal Company Survey . Yeah and social network methods. The second topic digitalization industrial. Thats what iot is all about. Itd existed for four years. The internet is but it brings a binary system to the industrial world to millions and millions of people who may not have a job tomorrow. With the internet does is split you are in or you are out and thats going to become to the industrial world. They will do nothing about integrating society. We are going to have cars in the streets but they are not selfdriving. Society has technology in digitalization reaching the industrial world. 400 leah people. Lets go to questions. Please identify yourself traits that lets go to questions from the audience about it. Right here, jon. Two things. One, i guess this thing is over intellectualize. The very last point about longterm if we say we are in this for the long term i mean that all stakeholders and schwab stakeholders were the first one to develop it. Obviously youre going to do things for the stakeholders and that would be one comment. Joe brown said this 199097. You are in business for the long term. Doing good is good business. Second let me ask you a direct question. What we are m seeing his employs muser fashioning what we do so attitudes towards tobacco, attitudes to saudi arabia are conditioned by whether people in the Service Business are willing to work together. That largely many see this in Silicon Valley in the Tech Industry so sears may want to take a position on something fashioned by what joe said 89 of what the people think as you speak out but what is the specific issue and saudis are the most difficult. China is probably difficult issues. Thank you for asking the question. I think saudi is a great example for the mostou part the first yr after castros since then there has been silence but he raised a really important point that we are seeing in Silicon Valley in particular the same time we are seeing ceos we are also seeing employees get her activeve in push their companies into uncomfortable corners perhaps. Youve seen perhaps a lot of companies walk out and Certain Companies with employees and other Companies Push back on a contract with the u. S. S Border Patrol and the d. O. T. And other intelligence. It puts them in difficult positions and i dont think folks have figured out what the model is for that. As i understand it the ceo made an ethical Advisory Council of experts from inside and outside the company and employees to discuss this and they kept the contract. Im not sure where they stand now but its a highclass problem to have an essay that because this is happening in industry byy workers who are wellpaid and very much in the band and we will see what happens, recession when jobs are to secure will there still be the same employee push. Other questions from the audience. Right back here. Can you tell us any more . Spanked you see a difference between private companies and how do you view the social impacts by expression of the companysvi values versus the issue of the day it may be out there and getting raised in a different way like that. Im just curious how you would view that and how you view the expression of your values that is your social engagement. When you take your issues basically. Private companies have more leeway to speak out but you have to be careful because we are seeing this mostly with Ipo Companies espousing a social purpose and sometimes you set yourself up for ridicule. We worry about raising consciousness. Someone called this yoga babble. If he or she were also an ir person. I do think in some ceos have said makes more sense with issues that are close to the companys issues. A former ceo of pepsi said you have to stay close and you have to be core to the company at heart. We have time for a couple more. Jon and i were j part of a discussion and people were straight up about what they should and should not say. My belief was any issue that affects her associates that we should issue an expression of support. Si human rights and lgbtq and religiousan freedom. Then me have a reason to speak out orr hed another way that this affects us we distribute 30 to the u. S. And we have had issues around ru486 the morningafter pill. We take a very firm view and the fact that we are doing that and i understand but its a product and we distribute it. Spent thats an interesting point. Walmart ceo spoke of d recently and the company took new policies on gun violence asking customers not to bring guns into their stores and stopping the settling of ammunition used for military style assault where fulton of being congress to reconsider the Assault Rifle ban and increase background checks. This came weeks after 22 people were gunned down in a store. I know from talking to a director and the director had a couple meetings on the those very much tied to employees in mind rather than we are all forgetting control. It has to do with ensuring the safety of employees and customers who visit the store. At the end of the day you cannot make it every time with everybody but spelling to our people why they took a position. Two years ago i decided to take an 83 billiondollar contract. I explained it to people. I said look this is why did it or didnt do it. Explain it to people. You have 300,000. Seen it thank you very much. We are going to talk in this next session with one of the top engineers who is developing all sorts of extraordinary machines that can do the new functions in the workplace and we are going to demonstrate that as well. Please welcome to the stage mark graber to his the odyssey of boston dynamics and interviewed by jason at the wall street journal. [applause] mark im not sure i belong here but you most certainly do. Its great to be here but have a late guest i believe. We have one more gas. Wed like to welcome to the room spot wherever you are, come on in spot