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Walgreens’s Deceit Exposed in Shareholder Meeting

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If Walgreens Honestly Prioritizes All Stakeholders, It Would Convert to a Public Benefit Corporation

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Walgreens's Deceit Exposed

Chicago, IL - Walgreens Boots Alliance Inc (NASDAQ:WBA) investors learned today that the company's stated commitment to all of its stakeholders, as outlined in the Business Roundtable's Statement of the Purpose of a Corporation, was a public-relations effort rather than a real change in stance.

The National Center for Public Policy Research presented a shareholder proposal at Walgreens's annual meeting today, testing whether Walgreens's asserted commitment to stakeholder capitalism would lead it toward becoming a public benefit corporation (PBC) - the only legal way for a company to move away from its primary duty to shareholders.

"Stakeholder capitalism is a fraud. Either it’s the same old - legally required, totally effective - shareholder capitalism with a new PR team, or it's CEOs trying to become unelected economic czars," said Scott Shepard, director of the National Center's Free Enterprise Project (FEP), who presented the proposal at today’s meeting. "Either way, Walgreens is a fine company that should focus on efficiently and profitably providing medications and services to virtually the whole country instead of indulging the ever-inflating egos of misled corporate executives."

At the meeting, Shepard introduced his proposal saying, in part:

The Business Roundtable, a social club for wealthy CEOs, declared in 2019 that it had redefined the corporate purpose. It said the purpose had shifted from the traditional and legally required rule of shareholder primacy to a new theory of stakeholder capitalism. Under it, CEOs and boards of directors would supposedly run the company for the benefit of all stakeholders, meaning "for everyone."

The problem: it's impossible for company executives, at Walgreens or elsewhere, to make decisions that legitimately capture all stakeholder interests, since stakeholders have divergent interests. Just consider how deep social, political and economic divisions are these days.

Even if there were, that's not what CEOs and companies even attempt to do. They do not poll all stakeholders, feed the results into some objective decision process, and then enact the result.

BlackRock's Irresponsible Letter

Consider BlackRock CEO Larry Fink's arrogant and irresponsible letter to CEOs just last week. In it, he admitted that "[d]elivering on the competing interests of a company’s many divergent stakeholders is not easy.... In this polarized world, CEOs will invariably have one set of stakeholders demanding that we do one thing, while another set of stakeholders demand that we do just the opposite."

How does Larry decide? He listens to the stakeholders who demand - conveniently - exactly what he wanted to do in the first place.

But that isn't stakeholder capitalism. It isn't capitalism at all. It is an insurrection by c-suites and CEOs against their bosses - the ultimate investors.

"The Business Roundtable is the American heart of attempted insurrection by the CEO class," said Shepard after the meeting. "To stand with the Roundtable is to stand with BlackRock’s Larry Fink and Bank of America's Brian Moynihan against our country's free market capitalism and free society. Walgreens is still trying to have it both ways, but that’s just not possible anymore."

The National Center's proposal can be found on pages 103-105 in the Walgreens 2022 Proxy Statement. Shepard's supporting statement can be read here and heard here.

Today’s meeting marks the third time FEP has participated in a shareholder meeting in 2022. To schedule an interview with a member of the Free Enterprise Project on this or other issues, contact Judy Kent at (703) 477-7476.

About the Free Enterprise Project

Launched in 2007, the National Center's Free Enterprise Project focuses on shareholder activism, the preservation of free markets that respect shareholder and other property rights, and the confluence of big government and big business. Over the past four years alone, FEP representatives have participated in over 100 shareholder meetings - advancing free-market ideals about health care, energy, taxes, subsidies, regulations, religious freedom, food policies, media bias, gun rights, workers’ rights and other important public policy issues. As the leading voice for conservative-minded investors, it annually files more than 90 percent of all right-of-center shareholder resolutions. Dozens of liberal organizations, however, annually file more than 95 percent of all policy-oriented shareholder resolutions and continue to exert undue influence over corporate America. FEP also lodges lawsuits in defense of shareholder rights and free markets, participates in regulatory proceedings and contributes to legislative and regulatory reform aimed at reining in out-of-control corporate executives, protecting the corporate world for people of all viewpoints and backgrounds and pushing corporate America back to its genius and its job: business, not left-wing activism.

FEP activity has been covered by media outlets including the New York TimesWashington PostUSA TodayVariety, the Associated Press, Bloomberg, Drudge Report, Business Insider, National Public Radio and SiriusXM. FEP's work was prominently featured in Wall Street Journal writer Kimberley Strassel’s 2016 book The Intimidation Game: How the Left is Silencing Free Speech (Hachette Book Group).

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 60,000 active recent contributors. Contributions are tax-deductible and may be earmarked for the Free Enterprise Project. Sign up for email updates at https://nationalcenter.org/subscribe/.

Follow us on Twitter at @FreeEntProject and @NationalCenter for general announcements. To be alerted to upcoming media appearances by National Center staff, follow our media appearances Twitter account at @NCPPRMedia.