For CEOs of a public company, an investor like BlackRock might be an ideal catch. It has deep pockets, a track record of taking a long-term view, and a stellar reputation. When its leaders talk, you listen.
And last week, Larry Fink, founder and CEO of BlackRock, had something to say. He sent a letter to CEOs of public companies telling them for BlackRock to invest, they must now show how they make a positive contribution to society.
This takes the idea of doing well by doing good to a whole new level, as Fink makes it clear companies that expect investment from the world’s largest money manager better be able to prove they do more than just make money.
Companies must now prove they perform a social good, that they resist the pressure to think in short-term returns to shareholders, that they not sacrifice investments in employee development, innovation, and capital expenditures that are necessary for long-term growth. ContentMiddleAd
BlackRock hasn’t suddenly donned a white hat. No, the company with more than $5.7 trillion under management says investors and the society they live in are increasingly expecting the private sector to do more as the public sector does less, to address what Fink calls a paradox of high returns and high anxiety as secure employment and retirement become a distant dream for millions.
The letter is a good read. But it got me thinking
Imagine if the mayor of your city, or the governor of your state, sent a letter to the major employers and companies in your region laying down a similar challenge. How would your credit union respond?
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This is comparing apples and oranges to a degree, of course. Credit unions are chartered not-for-profits with members not shareholders, but the fundamental point is much the same. That point is that credit unions long-term sustainability, much less growth, is based on how well they serve the needs of their community.
So, sure, your mission statement and the cooperative movement’s founding principles speak to social purpose. But, specifically, when responding to a letter like this, how would you respond? Are you satisfied with how you would respond today? Moreover, what might you aspire to include in your 2023 response?
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