BlackRock CEO Larry Fink has published his annual open letter, always one of the business world’s must-read missives of the new year. This year’s letter focuses on the topic of stakeholder capitalism—the idea that corporations have not just a duty to their shareholders, but to everyone impacted by their products and policies.
While the idea of stakeholder capitalism is a noble one, some critics (including in a recent New York Times essay) have pointed out how it’s become a buzzword in the world of the super-rich—a term thrown around to elevate their own status. Regardless, the CEO of the world’s largest asset fund has clearly embraced the term in his 2022 letter. As Fink describes it:
Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not “woke.” It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.
According to Finky, BlackRock believes “companies perform better when they are deliberate about their role in society and act in the interests of their employees, customers, communities, and their shareholders.”
And to that aim, he announced the launch of BlackRock’s Center for Stakeholder Capitalism. The new Center, Fink said, will “create a forum for research, dialogue, and debate” around the benefits of stakeholder capitalism—the benefits to stakeholders, society at large, and, yes, shareholders. It’s that last bit Fink doesn’t shy away from and may help other business leaders see that doing the right thing can go hand in hand with making lots of money. At least that’s what the leader of the firm that manages over $10 trillion of capital seems to believe.
As Fink ends his letter, he says “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 and help realize the power of capitalism for all.”