Larry Fink of BlackRock Quintuples Down on the Purpose Imperative

By Mary Ellen Schaafsma

Jan 24, 2022

On January 18, 2022, for the fifth year in a row, Larry Fink, Chief Executive Officer of BlackRock wrote about the business imperative for a clear sense of corporate purpose to catalyze long-term success. The type of purpose he describes is not the typical business purpose – centred on delighted customers, financial returns, or being the best in the industry – but on purpose anchored in values that serves as a company’s North Star, a new decision lens on all it does, that leads to business success and societal well-being. It is purpose at the very core of the business – the reason it exists at all that enables it to grow, succeed and deliver to shareholders and other stakeholders alike. As he declared in 2019, purpose and profit are inextricably linked. He is clear, this is not abandoning capitalism, it is building out a more wholistic form of it, with the understanding that profits are not the only desirable outcome in the world and matter little when the environment and society are deteriorating around us.

“Stakeholder capitalism … is capitalism, driven by mutually beneficial relationships between you [the company] and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism”.

These past few years have been like a glass of frigid water in the face – a wakeup call that people and planet must receive equal attention to wealth creation. That ‘getting ahead’ is a mutually dependent thing, not done in isolation or without consequence. That GDP is not the sole measure of an economy’s success. Instead, we are increasingly realizing that we need to incorporate well-being components into our definition of success: healthy people and planet. Many of the problems of today are because we have been in a significant period of forgetfulness, or mass willful ignorance, relying on financial success or stability to be the answer to well-being. Clearly, we have missed the mark. Wildfires, catastrophic weather events, pandemics, massive inequality on many levels, social polarization, poverty – no amount of economic success prevented any of these things and their toll has been immense, both on people and on economies.

“It’s never been more essential for CEOs to have a consistent voice, a clear purpose, a coherent strategy, and a long-term view. Your company’s purpose is its north star in this tumultuous environment. The stakeholders your company relies upon to deliver profits for shareholders need to hear directly from you – to be engaged and inspired by you.”

Larry Fink said it – five times – and we agree. When companies redefine their role in society to be about helping create a better world just by doing business, then the business itself becomes an engine for good. No longer do charities have to struggle alone with their incredibly limited finances to make a dent in our social issues; no longer do we point the finger at government to do something, but stop meddling; no longer is the environment ignored, or worse exploited, but nurtured by changing business practices and innovating new and profitable solutions. The evidence is in – businesses that have a societal reason for being grow and have the power to effect significant good in the world. Thank you to Larry Fink for doggedly asserting this sentiment – this is how beneficial change occurs. We hope you join this social purpose in business movement and become part of the solution to the world’s most challenging and existential issues. Contact us, we can help.

“It is more important than ever that your company and its management be guided by its purpose. If you stay true to your company’s purpose and focus on the long term, while adapting to this new world around us, you will deliver durable returns for shareholders”.

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