BlackRock CEO Defends Focus

Investment firm BlackRock has pushed companies to pursue a social purpose in addition to profits. The chief executive’s annual letter to investors defends this approach, which has been criticized as anti-business.

Up front in the title, “The Power of Capitalism,” Larry Fink addresses criticism head on and further explains in the letter:

“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.”

Fink states his belief clearly in the last paragraph:

“…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.”

The letter illustrates persuasive communication, focusing not on emotional appeal but logical arguments. For his audience, which he defines at the beginning as CEOs, he encourages a commitment to purpose—for leaders to let stakeholders “know where we stand on the societal issues intrinsic to our companies’ long-term success.” He writes “long-term” 18 times in the letter, using repetition to drive the point home. Fink illustrates a few leadership character dimensions, for example, authenticity, integrity, and courage.