Further to last week's Riches post and last year's annual CEO letter, BlackRock CEO Larry Fink's recently released annual letter to portfolio company CEOs: "Purpose & Profit" addresses: (i) the interrelationship of company "purpose" (the company's "fundamental reason for being - what it does every day to create value for its stakeholders") and profits - i.e., how purpose drives long-term profitability; (ii) the increasing call and need for CEO's to assume some responsibility for - and exert corporate leadership on - important societal issues, e.g., worker retirement, infrastructure, preparing workers for future jobs, that aren't being solved at the government level; and (iii) the anticipated increasing importance and materiality of ESG issues to corporate valuations, which is in large part a function of changing expectations and values associated with millennials and presumably younger generations.
The letter also identifies BlackRock's Investment Stewardship engagement priorities for 2019 (generally consistent with 2018) with reference to previously-published position papers:
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See also these takes on the letter from Weil, Cooley, Olshan, EdwardHauder.com, Business Insider, Institutional Investor, The New York Times, Forbes, Citywire, Financial News, and Bloomberg, and BlackRock's updated "Global Corporate Governance Guidelines & Engagement Principles." This post first appeared in this week's Society Alert!
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