9/25/2023 0 Comments Larry fink ceo letter![]() Stakeholders are pushing companies to wade into sensitive social and political issues - especially as they see governments failing to do so effectively. The World Needs Your LeadershipĪs a CEO myself, I feel firsthand the pressures companies face in today's polarized environment and the challenges of navigating them. Purpose guides culture, provides a framework for consistent decision-making, and, ultimately, helps sustain long-term financial returns for the shareholders of your company. It drives ethical behavior and creates an essential check on actions that go against the best interests of stakeholders. Purpose unifies management, employees, and communities. Similarly, when a company truly understands and expresses its purpose, it functions with the focus and strategic discipline that drive long-term profitability. Profits are essential if a company is to effectively serve all of its stakeholders over time - not only shareholders, but also employees, customers, and communities. Profits are in no way inconsistent with purpose - in fact, profits and purpose are inextricably linked. Purpose is not the sole pursuit of profits but the animating force for achieving them. Purpose is not a mere tagline or marketing campaign it is a company's fundamental reason for being - what it does every day to create value for its stakeholders. I wrote last year that every company needs a framework to navigate this difficult landscape and that it must begin with a clear embodiment of your company's purpose in your business model and corporate strategy. ![]() In addition to these pressures, companies must navigate the complexities of a late-cycle financial environment - including increased volatility - which can create incentives to maximize short-term returns at the expense of long-term growth. Fueled in part by social media, public pressures on corporations build faster and reach further than ever before. These issues range from protecting the environment to retirement to gender and racial inequality, among others. Unnerved by fundamental economic changes and the failure of government to provide lasting solutions, society is increasingly looking to companies, both public and private, to address pressing social and economic issues. Trust in multilateralism and official institutions is crumbling. In response, some of the world's leading democracies have descended into wrenching political dysfunction, which has exacerbated, rather than quelled, this public frustration. Around the world, frustration with years of stagnant wages, the effect of technology on jobs, and uncertainty about the future have fueled popular anger, nationalism, and xenophobia. Many see increased risk of a cyclical downturn. Market uncertainty is pervasive, and confidence is deteriorating. As we enter 2019, commitment to a long-term approach is more important than ever - the global landscape is increasingly fragile and, as a result, susceptible to short-term behavior by corporations and governments alike. As a fiduciary to these clients, who are the owners of your company, we advocate for practices that we believe will drive sustainable, long-term growth and profitability. Each year, I write to the companies in which BlackRock invests on behalf of our clients, the majority of whom have decades-long horizons and are planning for retirement.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |