Genpact CEO: Companies Have a Responsibility to Reduce A.I. Bias

There are two sides to artificial intelligence (A.I.). Certainly, A.I. provides more efficient and personable consumer experiences, such as music recommendations on Spotify or automated email filters on Gmail. But A.I. is clearly not just for fun and games. Machine learning technology can also use demographic data to hasten the process of who gets a job or a bank loan. But applying A.I. at scale requires collecting, and protecting, swarms of demographic data.

“If your data is restricted, then the machine will give answers that are already biased,” says Tiger Tyagarajan, CEO of global professional services firm Genpact. Tyagarajan tells Susie Gharib of Fortune that given public reliance on A.I. technology, companies have a responsibility to mitigate inherent bias by expanding data sources to include multiple demographics, not just a narrow set.

For example, an A.I. engine shouldn’t make assumptions based primarily on a person’s online connections, race, or even genres included in their public Spotify playlist.

The need for diversity doesn’t end with data feeds. Companies should hire and cultivate a diverse set of employees representing different ethnicities, genders, and professional functions who are able to guide the accumulation of data and the development of A.I. algorithms.

“We need real governance on A.I. If companies don’t collaborate on topics like bias, then the government will step in to regulate,” says Tyagarajan.

Watch the video above for more from Fortune’s interview with Tyagarajan.

Update Windows 10 Immediately, Warns Microsoft

Microsoft is sounding a red alert to Windows 10 users, warning them to update their operating systems immediately.

The company, in a blog post Tuesday, warned of two “critical” vulnerabilities that rival the previous “BlueKeep” crisis. As with that bug, the new issues are described as “wormable,” meaning hackers could use them to spread malware from one machine to another without any interaction from the user.

Microsoft said, so far, it has no evidence that the vulnerabilities were known to any third parties.

“It is important that affected systems are patched as quickly as possible because of the elevated risks associated with wormable vulnerabilities like these,” said Simon Pope, Microsoft’s director of Incident Response. “Customers who have automatic updates enabled are automatically protected by these fixes.”

If you don’t have automatic updates enabled, you can search for the patch by typing “Windows Update” in the search bar from the system’s start menu search bar.

The vulnerabilities are only present in Windows 10, which runs on more than 800 million devices today. Older systems, such as Windows XP, are not affected.

The comparisons to BlueKeep underscore how serious Microsoft is taking these security flaws. That flaw was deemed so serious that the National Security Agency got involved to warn people to update their systems.

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‘Rape and Incest’ Comments Highlight House Republicans’ Steve King Problem

House Republican leaders stripped Rep. Steve King (R-Iowa) of his power in January after he made racist comments—he no longer sits on any committees—but that hasn’t stopped King from making offensive remarks.

King, speaking in rural Iowa on August 14, attempted to defend not allowing abortion in cases of rape and incest. 

“What if we went back through all the family trees and just pulled those people out that were products of rape and incest? Would there be any population of the world left if we did that?” he said at the Westside Conservative Club in Urbandale, Iowa, according to the Des Moines Register. “Considering all the wars and all the rapes and pillages taken place and whatever happened to culture after society? I know I can’t certify that I’m not a part of a product of that.”

King’s latest remarks—part of a long string of racist and derogatory comments—underscored the challenge that the House Republicans face in recruiting more diverse members of their party to try to win back a majority, especially following the retirement announcement of the only black member of the caucus, Rep. Will Hurd (R-Texas). The comments also could endanger Republican hopes to win over female voters in 2020, as past Republican candidates’ insensitive remarks about rape and abortion caused them to lose two Senate elections in 2012. (Republicans won back the seats in 2018.)

House Republican leaders have denounced King, but remained mum about what action, if any, they might take. 

The No. 1 and No. 2 members of the House caucus, Minority Leader Kevin McCarthy of California and Minority Whip Steve Scalise of Louisiana, both said that King’s comments demonstrated why House Republicans had removed him from his committee assignments last January, but stayed silent on whether he should resign.

“I have a great deal of problems with that,” McCarthy said on Fox News of King’s comments. “Earlier in this Congress, there are things that Steve King said that I do not believe the party of Lincoln would stand for. And as a United Conference, we actually removed Steve King from his committees inside Congress, and I think this just continues to show why that action was taken.”

However, the No. 3 House Republican, Liz Cheney of Wyoming, did reiterate her calls for his resignation.

“Today’s comments by @RepSteveKingIA are appalling and bizarre. As I’ve said before, it’s time for him to go. The people of Iowa’s 4th congressional district deserve better,” she tweeted. However, she did not say what she might do to force him to resign.

(Spokesmen for McCarthy, Scalise, and Cheney did not immediately return requests for comment from Fortune on King.)

House Republicans could expel him from their caucus by a two-thirds vote of their conference. More drastically, King could be censured or reprimanded by a simple majority vote of the full House, and expelled by a two-thirds vote of the full House. Only five House members in history have been expelled from the chamber.

Even with no action from the House, King’s days as a representative may be numbered. While representing a district that voted for Trump over Clinton by 27 points, he won re-election in 2018 only by three points. His 2020 Democratic opponent, J.D. Scholten, who narrowly lost to him in 2018, got a boost from multiple 2020 Democratic presidential candidates who called on their supporters to donate to him. (The candidates also called on King to resign, which means little to King.) 

King, meanwhile, only had about $18,000 in cash on hand as of June for his re-election. He also faces Republican challengers, including State Sen. Randy Feenstra, who had more than $300,000 in cash on hand.

“I am 100% pro-life but Steve King’s bizarre comments and behavior diminish our message & damage our cause. Trump needs defenders in Congress, not distractions,” tweeted Feenstra.

Removed from his spots on the Judiciary and Agriculture committees in January after making comments about white supremacy and white nationalism, King has been faced with little to do as a representative in the minority party. The stripping of committee seats that Republican leaders took against King highlighted their comparative reticence to speak about offensive remarks made by President Donald Trump about women and minorities.

But even as a much-diminished representative, King, apparently, shows no signs of going away quietly.

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Israel Bans Entry to U.S. Congresswomen Ilhan Omar and Rashida Tlaib

Israel’s deputy foreign minister says the government has decided to bar two U.S. Democratic congresswomen who support the international boycott movement from entering the country.

Tzipi Hotovely told Israel Radio in an interview Thursday that “Israel has decided not to allow” Reps. Rashida Tlaib of Michigan and Ilhan Omar of Minnesota to visit as planned.

She says it is in keeping with a policy of denying entry to those who advocate boycotts of Israel.

Her remarks came shortly after President Donald Trump tweeted that “it would show great weakness” if Israel allowed them in.

The two newly-elected Muslim members of Congress are outspoken critics of Israel’s treatment of the Palestinians. Tlaib’s family immigrated to the United States from the West Bank.

Trump Ties Hong Kong Protests to China Trade Deal in a Move That Could Backfire

President Donald Trump late Wednesday seemed to conflate the protests in Hong Kong with the U.S.’s trade war with China. “Of course China wants to make a deal. Let them work humanely with Hong Kong first!” he tweeted. If Trump thought wielding the Hong Kong protests as leverage in the ongoing U.S.-China trade war would prompt concessions from Beijing, he seemed to have miscalculated—by a large margin.

Trump turned his Twitter attention to the growing unrest in Hong Kong on Wednesday, when he urged those involved to “be calm and safe” amid reports that the Chinese government was amassing troops on the border with Hong Kong. He later picked up the thread, looping the ongoing trade war into the matter.

“I know President Xi of China very well,” Trump tweeted. “He is a great leader who very much has the respect of his people. He is also a good man in a ‘tough business.’ I have ZERO doubt that if President Xi wants to quickly and humanely solve the Hong Kong problem, he can do it. Personal meeting?”

Trump’s decision to link the protests in Hong Kong with the trade war negotiations may have been a misstep, as it plays into China’s narrative of what the demonstrations are all about. Over the past two months, Beijing has repeatedly accused the U.S. of stirring up unrest in Hong Kong in order to serve the White House’s trade agenda. State media now runs news stories alleging that white foreigners attending the Hong Kong protests are actually CIA operatives instigating turmoil. The protesters themselves, meanwhile, cite demands for greater democratic freedoms as the reason for taking to the streets.

Beijing on Thursday appeared unmoved by Trump’s Twitter overtures. In a terse statement, the Ministry of Finance said that a threat by Trump earlier this week to levy the final $300 billion of Chinese exports violated the understanding Trump and Xi reached during the G20 summit last year and deviated from the path of reconciliation. “China has no choice but to take necessary measures to retaliate,” the Ministry concluded.

That cold rebuff sent a chill through global markets, which had showed upbeat signs just days ago when Trump announced his intention to postpone the tariffs. It’s unclear how China will retaliate. Beijing has been making ominous overtones for months and has a few options available.

Beijing also seems to be losing patience with the protests, as it has used heightened rhetoric to describe the demonstrations and leaned on businesses to call for an end to the actions. Last week, some 500 industry and political delegates from Hong Kong travelled to Shenzhen for a meeting convened by China’s Hong Kong Affairs office where they were urged to “stand up” against protesters.

Later that day, Hong Kong’s Real Estate Developers Association (REDA)—a group that represents some of the wealthiest individuals and firms in Hong Kong—issued a statement condemning the acts of a “escalating violence.” The following day, Cathay Pacific changed its mind about permitting staff to protest. This week, more business leaders signed petitions opposing the protests.

Nevertheless, there are more protests scheduled for the weekend in Hong Kong, and it’s hard to imagine, even if Xi agreed to meet with Trump on the matter, that the U.S. president could offer any resolution to the unrest. Trump views the protests as an economic issue, but for the protesters—many of whom feel isolated from Hong Kong’s economy—the issue is existential.

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Retaining Good Employees Is Tougher Than Ever, but Offering Paid Family Leave Can Help

What do Oregon, Connecticut, Washington state, New York, Massachusetts, New Jersey, Rhode Island, California, and the District of Columbia all have in common? Each has passed legislation securing paid family leave. Though the plans vary in scope—the terms of compensation, the length of benefits, and how they’re funded—they are similar in the assistance they provide employees who need time to care for their families and themselves. 

The benefits of paid family leave are clear. It strengthens participation in the workforce, secures employee earnings, and boosts the national economy, according to the AEI-Brookings Working Group on Paid Family Leave. It helps new parents build relationships with their children, which in turn boosts a child’s physical and cognitive health. It also improves employee’s mental health as they’re provided with financial and professional support from their employers. 

Over the course of their careers, most employees will need some time away to act as a caretaker. They could be a mother or father navigating life with a newborn, an adoptive child, or a foster child. They could need time off to care for an ailing parent, a son or daughter with a medical issue, or a matter of their own health. Or they might be facing additional responsibilities at home following a family military leave.

Under the Family and Medical Leave Act of 1993, eligible employees are granted 12 weeks of unpaid leave to care for family and medical needs—but there are no federal mandates requiring paid leave. And according to the Bureau of Labor Statistics, less than 20% of private sector employees had access to paid family leave in 2018. 

What is more common is access to other types of paid time off (PTO). Per a 2018 report from the AEI-Brookings Working Group on Paid Family Leave, 72% of employees had paid sick leave, and 74% had paid vacation time. Because these types of PTO are more accessible, employees will leverage their vacation days or their sick days to meet their obligations as caretakers. But these days are limited and may not be enough to handle responsibilities at home.  

In an already stressful time, employees can feel the financial strain that comes from receiving no or partial payment as they take a personal respite from work. Less than 50% of workers had money set aside in anticipation of their leave, 37% turned to other savings, and 30% borrowed money, according to a survey conducted by the Department of Labor and Abt Associates. More than a third of these men and women fell behind on bill payments, 15% turned to public assistance, and 31% cut their leaves short to ease their financial burdens. As monetary pressure mounts, the adverse effect it has on employees will impact their employers too due to reduced productivity. 

One of the biggest challenges for any employer is retaining skilled workers. In today’s tight labor market, business leaders are feeling, more acutely, the pressure of not just finding talented employees—but keeping them. One surefire way to strengthen these relationships is to support employees as they balance their personal and professional commitments. 

As the CEO of Guardian Life Insurance, I have personally seen the positive impact paid family leave provides employers and employees alike. The former more effectively attract and retain talent, and the latter benefit from greater financial security. And while the overwhelming majority of leave taken is by new parents, access to paid family leave is vital to all employees in addressing a multitude of personal needs. 

All of us, as employers, have the opportunity to find ways to support our employees and champion programs and legislation that would provide paid family leave. Employers like Airbnb and Netflix have led the way by offering leave plans to eligible employees. Starbucks has expanded its paid family leave benefits to its hourly employees. And Ernst & Young says their female turnover rate dropped significantly after revising their parental leave plan to give mothers and fathers equal time away. We too at Guardian have enhanced and added flexibility to our leave programs, and I encourage all business leaders to consider what more they can do for employees in this area. 

Support for paid family leave is prevalent among Democrats and Republicans. Most voters, around 84%, support a comprehensive national paid family leave policy that covers all people who work, according to a national survey commissioned by the National Partnership for Women and Families. This represents a major opportunity to positively impact many Americans by creating a bipartisan framework that would establish public-private funding options—including those that would focus on working class employees and extend existing tax credits for small businesses to encourage expansion and implementation of paid family leave. 

Recently proposed legislation from Senators Kyrsten Sinema (D-Ariz.) and Bill Cassidy (R-La.), which would amend the child tax credit to ease financial burdens on new parents, is evidence that both parties can find common ground on this critical issue. And as Congress works to create new laws, I hope our legislators will act swiftly to reauthorize the one employer tax incentive already in law: the Paid Family Leave Pilot Extension Act.

While no one act of company or congress will resolve the issue, every one of them makes a difference to the employee that benefits. Ask any business leader and they’ll agree: Employees are our lifelines. Working together to support them through every season of their lives is the right thing to do.

Deanna M. Mulligan is president and CEO of The Guardian Life Insurance Company of America.

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Google Doodle Celebrates Ignacio Anaya García, the Man Who Invented Nachos

Google’s Doodle has celebrated loads of less-than-famous people whose inventions have changed and bettered the world. But today’s honoree is one we can all rally behind.

Ignacio Anaya García was born on this day in 1895, but he became a legend in the food world in 1943 when he assembled tortilla chips on a plate and topped them with cheese and jalapeño peppers. It seems second nature today, but until then, no one had ever put together a plate of nachos.

The dish was a happy accident. Garcia was a Maître d’ at a popular restaurant in the border town of Piedras Negras, Coahuila. When a group of Army wife customers arrived, he was unable to find the restaurant’s chef, so he threw the dish together, calling it Nachos especiales, a play on his own nickname “Nacho” (short for Ignacio).

The dish, as you might guess, was a hit. By 1960, Garcia (who passed away in 1975) had opened his own restaurant, called El Nacho.

While he could have patented his creation, Garcia refused to, which opened the doors for restaurants and bars everywhere to serve the dish.

“It’s just a snack to keep my customers happy and well-fed,” he reportedly said, “It’s like any other border dish”

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Out of the Office: Sweet Success with the Founder of Dylan’s Candy Bar

Do you think you have a big sweet tooth? Have you tried over 7,000 different kinds of candy? Dylan Lauren has. But that’s just the beginning of how she built Dylan’s Candy Bar.

Fortune’s Beth Kowitt stepped out of the office and into Dylan’s Candy Bar in New York City to talk with the store’s founder about how she turned that sweet tooth into 27 locations of sweet success. 

Lauren dishes about how she drew inspiration from a classic candy movie, what advice her famous father–designer Ralph Lauren–gave her on how to run a business, and, of course, what kind of sweets really cure her candy cravings.

WeWork IPO: This Accounting Rule Change is ‘Crushing’ the Company’s Financials

WeWork has its work cut out for them.

The company now known as The We Company finally dropped their IPO filing on Wednesday—and boy oh boy, was it a lot to unpack.

While investors and analysts alike are examining WeWork’s plan for profitability, astounding losses (to the tune of net $904 million so far for 2019), and 3 share class structure, one major thing is impacting their balance sheet—an accounting rule change.

In 2016, the Financial Accounting Standards Board (FASB) issued an accounting rule change, ASC 842, stating that right-of-use assets and lease liabilities for leases of more than 12 months need to be recognized on the lessee’s balance sheet—or in other words, WeWork’s bread and butter, leases, need to be accounted for as on-balance sheet liabilities.

Previously, under ASC 840, companies were permitted to categorize capital and operating leases differently, and only report operating leases in the footnotes of their financial documents (or, off-balance sheet). But some experts believe the accounting change will better help reflect the actual liabilities a company like WeWork is undertaking for the future.

And according to Richard Trimber, senior counsel of the corporate practice group at General Counsel, P.C., the new accounting concept is “crushing” WeWork’s balance sheet.

“Without that, their balance sheet would be in much better shape if they could account for the old way,” Trimber told Fortune.

In fact, WeWork’s liabilities (in the form of long-term lease obligations) increased over 600% from 2018, from $2.88 million to a whopping $17.91 million in 2019—all because of accounting requirements.

The company noted under the risk section in their newly-minted S-1 that “the adoption of ASC 842 had a material impact on our consolidated balance sheet,” with “lease right-of-use assets, net totaling approximately $15 billion and lease obligations totaling approximately $18 billion included on our interim condensed consolidated balance sheet” as of June this year.

Basically, this means that WeWork needs to report any lease longer than 12 months on their balance sheet as a long-term lease liability. And to some experts, the massive impact the accounting rule change had on the company’s balance sheet is certainly telling.

“For the benefit of the shareholders, they can go, ‘wait, this is a company that is not very strong financially. The balance sheet strength is very poor, and they better have better execution … in order to stay ahead of the liabilities that are chasing them down,” Trimber says. In fact, Trimber suggests the accounting rule change is a blessing for those looking into WeWork’s filing, given “the transparency it gives you” in the context of the “ponderous liabilities that are weighing this thing down from the top.”

Others think the rule, which was implemented on WeWork’s 2019 figures but not 2017 or 2018, is helpful in giving investors a more holistic look at what the company is really working with.

“It will be a clear reminder to investors of the long-term liabilities the company has undertaken to serve the mostly short-term agreements they have with their own clients,” David Snider, founder and CEO of Harness Wealth, told Fortune earlier this week. And to Trimber, the massive change in WeWork’s balance sheet should “bespeak caution on this latest ‘unicorn.’” 

It seems WeWork is fully aware of the impact the FASB rule is having. The company referenced the rule, ASC 842, 44 times in the filing.

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‘A Mess Any Way You Look at It’: 5 of the Weirdest Things in the WeWork IPO Filing

“We” may have some corporate governance issues.

Officially known as The We Company, the startup dropped its hotly anticipated IPO filing Wednesday and it didn’t take long for corporate governance types to start noting the…irregularities. Here were 5 that stood out.

All in the family

Part of WeWork’s management team is Neumann’s wife and co-founder, Rebekah, who serves as the company’s Chief Brand and Impact Officer. She is also the founder and CEO of WeGrow, the elementary education portion of The We Company. Unrelated fun fact: Gwyneth Paltrow is her cousin.

“Rebekah has been a strategic thought partner to Adam since our founding and has actively shaped the mission and strategy of The We Company and its global impact agenda, as well as being the primary voice and leading advocate for the We brand. Rebekah has never been paid a salary from us,” the filing states.

First class shares for Adam

Adam Neumann’s shares will hold a controlling portion of the voting power because of his ownership of high-vote stock, which carries 20 votes per share. WeWork’s IPO will have three classes of common stock: Class A shares have one vote each. Class B and Class C shares are the “high-vote stock.” According to the filing, “Adam will have the ability to control the outcome of matters submitted to the Company’s stockholders for approval, including the election of the Company’s directors. As a founder-led company, we believe that this voting structure aligns our interests in creating shareholder value.”

Index funds won’t touch this

Sure, maybe for the shareholders of the high-vote stock. But in a section titled “Risks Relating to This Offering and Ownership of Our Class A Common Stock,” the prospectus sounds a warning bell about the differences in voting rights harming the value and liquidity of the Class A shareholders. Many index providers restrict tiered share structures. “As a result,” the filing cautions, “the multiple-class structure of our common stock may prevent the inclusion of our Class A common stock in these indices and may cause stockholder advisory firms to publish negative commentary about our corporate governance practices.”

The commentary from corporate governance expert Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, is certainly negative: “It’s a mess any way you look at it from a governance standpoint.”

A charity case

Can Class A shareholders take comfort in one feature that the WeWork prospectus outlines that could diminish Neumann’s voting power? If Adam and Rebekah Neumann do not fulfill a $1 billion charity pledge within 10 years, the number of votes in their high-vote stock falls from 20 to 10. “In connection with this offering, Rebekah and Adam are dedicating additional resources to amplify the positive global impact of our organization. This effort is designed to enable us to scale our social and global impact as the Company grows.”

“They’re sunsetting if they give money away?” says Elson. “Where does that come from? If you want to invest in philanthropy then do it, but this isn’t being sold as a philanthropy. The whole thing is bizarre.”

That’s one unusual succession plan

Speaking of bizarre, there are curious provisions in the event that Adam dies or becomes disabled. A committee consisting of two current board members—Bruce Dunlevie of Benchmark Capital and Steven Langman, co-founder of private equity company Rhone Group—and Rebekah, who is not a board member, will choose the new CEO. If neither Dunlevie or Langman are currently on the board when this happens, Rebekah will choose a board member or two to help her pick the company’s new leader.

“Succession planning is being done by the spouse, not the independent directors, which is strange,” says Elson.

What’s more, if Rebekah isn’t able to serve in her succession planning duties, “the trustee then acting on behalf of Rebekah and Adam’s estate will serve in all such capacities and make all such determinations,” says the prospectus.

Let’s hope it doesn’t come to that.

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