BlackRock CEO Larry Fink has spoken again, and this year he’s raising the bar.
A year ago, Fink wrote a letter to CEOs that sent shockwaves through the business community. Directed at those companies where BlackRock invests, Fink set out an imperative for companies to take a longer-term view of business value. Some responded skeptically to his challenge, while others struggled to find a path to that vision.
This year Fink gets more specific, advocating for practices BlackRock believes will drive sustainable, long-term growth and profitability. He is also looking for business to step up to some very real challenges.
“Unnerved by fundamental economic changes and the failure of government to provide lasting solutions, society is increasingly looking to companies, both public and private, to address pressing social and economic issues,” said Fink. And, “Companies must navigate the complexities of a late cycle financial environment—including increased volatility—which can create incentives to maximize short-term returns at the expense of long-term growth.”
Bottom line, Larry Fink says to CEOs, “The world needs your leadership. As divisions continue to deepen, companies must demonstrate their commitment to the countries, regions, and communities where they operate, particularly on issues central to the world’s future prosperity. Companies cannot solve every issue of public importance, but there are many, from retirement to infrastructure to preparing workers for the jobs of the future – that cannot be solved without corporate leadership.”
I am working with a group of CEOs in Orange County on just this type of effort. In addition to making progress on issues in our region, we are mobilizing a national network of CEOs, with the help of the Center for Higher Ambition Leadership (CHL) and McKinsey. Our goal is to drive social innovation at the regional and community level across the country. The CEO Leadership Alliance will launch in the Fall of 2020 at a CEO Summit hosted by our Orange County group. Together we will sponsor outcome-driven, cross-geographic communities of practice to accelerate progress around the cross cutting “building blocks” for healthy economic and community well-being—such as nutrition, talent development, housing, and building powerful innovation ecosystems that can super-charge a community’s future.
The challenge for every CEO today is to take Larry Fink’s rallying cry and embed it in the core fabric of their company. In my experience, the best way to do this is through CEOs committing together to improve the communities where they live and work. As these CEOs work together, they learn together, and their impact accelerates both their own company’s growth and the communities growth.