Maybe it’s a sign of the times. Or, maybe it’s the universe saying to expect the unexpected.
I never expected BlackRock CEO Larry Fink the leader of the world’s largest asset manager to offer inspiration and insight on what it means to reassess core assumptions about modern finance.
The money we manage is not our own, Fink says his annual letter to CEOs that was released in early January 2020. It belongs to people trying to finance long-term goals like retirement. And we have a deep responsibility to promote long-term value.
BlackRock has $7 trillion yes, that’s trillion with a t under management. Its CEO seems an unlikely source for inspiration for a member-owned financial cooperative. Yet, his words could be those of the CEO of a $50 million credit union speaking at the institution’s annual meeting in a local union hall.
And much of Fink’s letter this year to BlackRock investors is about his company’s adoption of accountable and transparent capitalism, which focuses on the environmental and social impact investment decisions.
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In other words, the new BlackRock imperative is to invest with purpose. But it’s notable that this has also been a longtime credit union imperative. Organizations that lead with purpose over pure profit do better in the long run for themselves and everybody around them.
Connecting With Purpose
A company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders, Fink says in his letter. A strong sense of purpose and a commitment to stakeholders helps a company connect more deeply to its customers and adjust to the changing demands of society. Ultimately, purpose is the engine of long-term profitability.
I couldn’t agree more. Credit unions’ strong sense of purpose is codified in the seven cooperative principles. Although these principles are not identical to the corporate ambitions expressed by BlackRock and the Business Roundtable which recently redefined the purpose of a corporation to promote an economy that serves all Americans they’re similar enough that the credit union movement risks its message being co-opted by distinctly non-cooperatives.
Practicing What’s Proven
Credit unions have always served the needs of members and communities. They’ve always worked toward an economy that serves everyone. Inclusion and self-determination? That’s baked into the DNA of the movement. Purpose as an equal partner to profits? That’s been a part of what sets credit unions apart from day one.
Credit unions know how to practice their principles. Now, it’s time to promote them from the board level, throughout the organization, and among every individual member.
That means that at the executive level, and as a movement, we need to encourage leadership that talks about the long-term value that clear purpose creates. We need to show the demonstrable impact each cooperative has on its members and community.
Collaboratively reflecting on this theme on how leading with purpose creates a greater impact should provide hope and focus. It should also yield new ways to differentiate and clarify the credit union value proposition.
So, where to start? First, share Fink’s letter with your management team and board. You can read it right here: A Fundamental Reshaping of Finance. Use Fink’s words and ideas to spark a conversation about how your credit union marries purpose and strategy or should or could do so. Do this with a sense of urgency, knowing there is no right or wrong response. The only wrong response is to do nothing at all.