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Woke or awake?

21 January, 2022

When the CEO of a $10 trillion asset management fund speaks, it’s worth listening. And when the world’s number one capitalist says what we’ve believed for 25 years, it’s worth celebrating too.

In his annual letter to CEOs published this week, BlackRock CEO Larry Fink sets out what he believes is necessary to help BlackRock’s clients achieve long-term financial returns. “Truly great companies”, Fink asserts, have a clear purpose, consistent values, and, crucially, recognise the need to benefit all stakeholders: employees, customers, suppliers and communities.

Two examples stand out from Fink’s letter. The first is his assertion that the pandemic has transformed the relationship between employers and employees. In the UK and the US, the number of people quitting their jobs is at a record high. These new jobseekers are demanding more: more flexibility, better pay, more meaningful work. The companies that offer these things are attracting the best talent; those that don’t are seeing high turnover and dwindling productivity.

The second is the race to net zero emissions, and how this is already shaking up industries. Every car manufacturer, Fink notes, is now speeding towards an electric future. But other sectors, from manufacturing to aviation, are also being transformed by the energy transition. Fink’s message is simple: be on the front foot or get left behind.

All this isn’t “woke”, Fink asserts. It’s capitalism that is alive to the world as it is. At Good Business, we’ve long held the belief that doing good is good for business. And whether or not you believe Fink is putting his money where his mouth is, he’s unarguably making stakeholder capitalism the new normal – and forcing corporate leaders to wake up to that reality.

By Sarah Howden