Thursday, September 26, 2019

CEO Daily: Brexit Anger Boils Over

Our daily brief on must-read business news…and more.

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September 26, 2019

Good morning. David Meyer here in Berlin, filling in for Alan.


Like many observers, I was dismayed at yesterday’s events in the U.K. Parliament, now back in action thanks to the judicial cancellation of its illegal suspension by Prime Minister Boris Johnson.


Johnson is pursuing a divisive path in an attempt to goad the opposition into agreeing to an election he can cast in people-versus-Parliament terms. He refused to apologize for breaking the law, as the Supreme Court unanimously found he had done, and called Parliament’s recent no-deal-Brexit-blocking law—to which he refuses to adhere—the “Surrender Act.”


When female MPs expressed fears for their own safety as a result of his language, especially given the 2016 assassination of anti-Brexit MP Jo Cox, and the death threats they continue to receive, he casually dismissed their concerns as “humbug.” Then he provoked fury by saying the best way to honor Cox was to “get Brexit done.”


It is now clear that, as things stand, there can be no Brexit deal; there is no way this riven Parliament can come together to pass it. It is also by now legally impossible to run Johnson’s hoped-for election before the October 31st Brexit deadline. So if Johnson is not somehow removed, an economically catastrophic no-deal Brexit is a near-certainty.


On a lighter note, late last week I met up with Daniel Nathrath, the CEO and co-founder of Ada Health, a startup whose “A.I.” app helps people work through their symptoms and determine whether they ought to see a doctor, before passing on its findings to those professionals in order to speed up diagnosis. Ada has taken nearly $70 million in funding, with investors including Google Chief Business Officer Philipp Schindler and William Tunstall-Pedoe, the entrepreneur behind what became Amazon’s Alexa.


Nathrath had some interesting things to say about having a Germany-based company operating in the health care A.I. space these days. Germany is, after all, the cradle of data protection law, and its strong privacy norms last year spread across the EU in the form of the General Data Protection Regulation (GDPR.)


He said Germans’ strict ideas on privacy used to be a hindrance to the company, with some doctors “making up reasons” to resist innovation. Now, however, it “will be a competitive advantage for us coming from Germany rather than the U.S. because people know they can trust us,” Nathrath said. “You see some of the things that happen in the U.S. or China with data…because of the GDPR, it’s documented that we would try to uphold the highest standards.”


Health data is of course a rare area where the U.S. has federal data-privacy legislation, but nonetheless it will be interesting to see whether the GDPR really does give the EU’s sensitive-data-handling firms an advantage in global perception.


More news below.


David Meyer
david.meyer@fortune.com
@superglaze


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TOP NEWS


Strike Impact


British Airways owner IAG has issued a profit warning, saying its operating profit for this year will be $235 million lower than previously thought. More than half of that is due to strikes earlier this year—and the underlying pay-and-conditions issues have still not been resolved between BA and the pilot's union, so further strikes could also hit profits. BBC


ABN Amro


The Dutch bank ABN Amro is under criminal investigation in the country over suspected money laundering. Prosecutors think it may have failed to report suspicious transactions. Bloomberg


ECB Board


Sabine Lautenschläger, Germany's hawkish representative on the executive board of the European Central Bank, has quit. She (like many in Germany) does not agree with the ECB's low interest rate policies. She was also the only woman on the 25-strong board. So Berlin's decision regarding her replacement will be closely watched. Financial Times


Blue Cross


Blue Cross and Blue Shield of North Carolina CEO Patrick Conway is out, after the board received new details about an allegedly alcohol-related highway collision he was involved in a few months back. The company said: "Despite Dr. Conway's many successes during his tenure at BlueCross NC, we feel that our constituents are best served by naming an interim CEO and beginning a formal search for a permanent replacement." Wall Street Journal



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Content From Deloitte

The Digital Supply Chain


Tech is disrupting most everything, including supply chains. In preparation for Industry 5.0, where people work alongside machines, Deloitte and the Association for Supply Chain Management are creating standards to help companies navigate the digital age. 


Read more


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AROUND THE WATER COOLER


CrowdStrike Limelight


What is CrowdStrike, the company referred to by President Trump in the "transcript" of his now-notorious called with Ukrainian President Volodymyr Zelensky? As Fortune's Natasha Bach explains, it's the U.S. firm that pinned the 2016 DNC hack on Russian state hackers. Fortune


Direct Listings


Why are direct listings becoming an increasingly popular alternative to the traditional IPO? Fortune's Michal Lev-Ram: "Companies undertaking direct listings don't have to pay banks tens of millions of dollars in under­writing fees. They have to pay advisory fees only…Furthermore, because no additional stock is made available, there's less dilution for existing investors." Fortune


BP Sponsorship


The Royal Shakespeare Company is facing a boycott by young British people over its sponsorship deal with BP. The fossil fuel company sponsors a scheme that lets 16- to 25-year-olds see Shakespeare's plays at a cheap price, but young climate protestors say taking up those tickets implies promoting "a company that is actively destroying our futures by wrecking the climate." Guardian


Sexual Harassment


Anna María Farías, the assistant secretary for fair housing and equal opportunity at the Department of Housing and Urban Development, writes for Fortune that HUD and the Justice Department have had some success in fighting sexual harassment in housing, but more needs to be done. "I encourage landlords, property managers, and individuals in maintenance support roles to meet their responsibility to adhere to federal housing laws," she writes. Fortune


This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.


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