Are CEOs so busy doing good that they have taken their eye off the ball?

When Silicon Valley Bank failed, it quickly emerged that management had messed up. Most importantly, the firm had not hedged against the rapid interest rate hikes initiated by Federal Reserve Chairman Jerome Powell to fight inflation. As a result, it sustained enormous losses on its investments, ultimately leading to a liquidity crisis and a run on deposits.

Possibly most damning, in a year convulsed by 40-year-high inflation, war and historic losses in the bond market, the bank went many months without a risk officer.

Where was the CEO? Even as his business foundered, Greg Becker found time to engage in numerous social causes. He served on the board of the Silicon Valley Leadership Group, which declares its mission to be "establishing a new vision of corporate citizenship and working to catalyze a more inclusive, equitable and sustainable future…" He was also a member of the executive advisory board of the Alliance for Southern California Innovation.

Under Becker, the bank became laser-focused on solar financing and had committed at least $5 billion to sustainability efforts. Will those loans pay off? We shall see. They also gave tens of millions of dollars to the NAACP, ACLU and National Urban League.

In addition, each year SVB hosts an event called Tech Gives Back, which the bank describes as "an international service event… benefiting more than 30 nonprofit organizations around the world…supporting diversity, equity and inclusion, access to the innovation economy, and environmental sustainability."

SVB also engaged in DEI training, offering courses and hosting "Conversation Circles" to address "systemic racism and social oppression."

Was Becker caught up in those programs? How much time did executives at SVB spend on such initiatives? Hard to say, but it's easy to speculate that more time should have been spent, say, studying bond markets.

Silicon Valley was not the only bank failing to mind the store. And certainly not the only American company awash in social justice programs. Indeed, such activities have become the norm and, for a California company eager to hire young people, no doubt a necessity. It is undeniable that corporations have become increasingly enmeshed in causes and ambitions that go way beyond their historic mandate of making money for shareholders.

Is that a good thing? Maybe not. U.S. productivity last year took the biggest hit since 1947, causing anxiety among tech managements in particular, according to the Washington Post. Could it be that workers, following the lead of their CEOs, are distracted as well?

This diversion of effort and attention got a big boost in 2019, when the Business Roundtable issued a new mission statement for American corporations, signed off on by 181 CEOs who committed "to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders." Note that shareholders, the actual owners of the businesses, who put money up for new plants and new products and deserve rewards for such risk-taking, came last on that list.

The Roundtable admitted as much, writing that prior statements had "endorsed principles of shareholder primacy – that corporations exist principally to serve shareholders…. the new Statement supersedes previous statements and outlines a modern standard for corporate responsibility."

JP Morgan's Jamie Dimon signed onto the new mission statement, saying "Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term."

A cynic would argue that if you are investing in your workers (or treating your suppliers well etc.) because that's the path to success, i.e. profits, not much has changed.

Company executives are also pushed into do-goodism by the huge surge in ESG (environmental, social and governance) investing, which now directs tens of trillions of dollars of investment capital into companies that swear an oath to prevent climate change, correct racism and generally tread a liberal path while still making widgets.

ESG funds were hot as a pistol in 2021, reaping huge inflows, but flopped in 2022 as oil stocks outperformed the broader market. The S&P 500 Energy index rose 61 percent while the market overall closed down about 20 percent. But they will be back and will continue to influence CEOs.

The new pressures allow and even encourage CEOs to meddle in all kinds of issues, which frequently leads to trouble. Delta and Coca-Cola found that out when they weighed in on the fight over Georgia's voting law passed by the Republican-led state legislature in 2021.

Delta, initially tempered in its efforts to influence the law, flip-flopped after CEO Ed Bastian had "discussions with leaders and employees in the Black community." He subsequently attacked the bill, leading to a stern and correct reproach from Governor Brian Kemp, who demanded Bastian compare the law to the rules in other states, including President Biden's home state of Delaware, which have much tougher restrictions. The brouhaha led Georgian Republicans to call for a boycott of the airline, and much unhelpful publicity.

Disney, too, found out the hard way that meddling in social issues beyond their gates can be costly, when Florida Governor Ron DeSantis stripped the entertainment company of its special privileges in the state.

Kowtowing to popular social causes has not served the corporate community well. Recent Gallup polling reveals that 71 percent of respondents said they were "somewhat" or "very dissatisfied" when asked their feelings about the "the size and influence of major corporations" – the worst reading ever, including after the financial crisis.

Corporations can be a force for good – by creating jobs and producing profits. All else is secondary. If firms do not treat their customers well, they will go elsewhere. If they don't treat their workforce well, productivity will drop and they will not outcompete their rivals.

The system works. The country is best off when our CEOs go chasing profits rather than virtue.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.