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BlackRock boss defends purpose
BlackRock boss Larry Fink believes that putting company purpose at the foundation of relationships with stakeholders is critical to long-term success.
Why it matters
With $10 trillion in assets under management, BlackRock is the world’s largest money manager and its views carry some weight. In his annual letter to CEOs, Fink argues that what distinguishes truly great companies is that they have a clear sense of purpose and that they recognise the importance of engaging with and delivering for their key stakeholders.
What it means
The reference to stakeholders rather than shareholders is instructive as he points to the “mutually beneficial relationships” a business needs if it is to prosper – between it and its employees, customers, suppliers, and communities.
He suggests those stakeholders need to hear a clear purpose from CEOs and where they stand on societal issues relevant to the company in order to deliver profits for shareholders.
“Employees need to understand and connect with your purpose; and when they do, they can be your staunchest advocates. Customers want to see and hear what you stand for as they increasingly look to do business with companies that share their values. And shareholders need to understand the guiding principle driving your vision and mission. They will be more likely to support you in difficult moments if they have a clear understanding of your strategy and what is behind it” – Larry Fink, CEO, BlackRock.