Reflections on BlackRock’s C-Suite ultimatum
CEOs and CMOs take note. On January 15, 2018, a provocative article published in the New York Times advised corporate leaders of impending pressure to dial up social responsibility. According to the article, chief executives of the world’s largest public companies will soon be receiving a letter from the CEO of BlackRock, one of the most influential investors in the world, stating that “their companies need to do more than make profits – they need to contribute to society as well if they want to receive the support of BlackRock.”
This article landed on the heels of Apple being told last week by two of its largest investors to make its devices less addictive to children.
Today’s leaders are feeling more pressure to contribute to society than their predecessors ever did
“Society is demanding that companies, both public and private, serve a social purpose,” wrote BlackRock CEO Laurence D. Fink in a draft letter that he shared with the author of the NY Times article. “To prosper over time,” Fink wrote, “every company must not only deliver financial performance, but also show how it makes a positive contribution to society”. Companies that don’t serve the community and demonstrate a sense of purpose will lose the license to operate, he contends.
What’s with BlackRock’s activist point of view on social responsibility?
Fink believes that “having a strong sense of purpose is inextricably linked to a company’s ability to maintain its profits.” At Level5, we happen to agree. In fact, we would add that a strong sense of purpose can also build culture, align organizations, help to attract and retain the best talent, and become a meaningful point of difference in crowded, highly competitive categories.
So, what’s your organization’s stated sense of purpose?
How is it supported or embedded in your strategic plan, your vision, mission and shared values? Could your brand promise and purpose be one and the same – much like Princess Margaret Hospital’s promise to ‘Conquer Cancer in our Lifetime?’ Do you have strategies and tactics to implement and measure your contribution beyond fundraising or goodwill?
If you’re looking for sustainable growth in a low-growth marketplace, as many of our clients are, embracing and operationalizing your firm’s contribution to society makes sound business sense. What’s more, it happens to feel pretty good! Get in touch if you’d like to learn how we can help you take your social initiatives to the next level.
By: Matt Kelly, Managing Partner