At the recent World Economic Forum in Davos, Laurence Fink, CEO of global investing giant BlackRock, told companies they need to contribute to society in order to receive BlackRock’s support. When someone with Fink’s clout tells everyone to jump, the appropriate response is: “How high?” “To prosper over time,” said Fink, “every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” I have two quibbles with this comment. First, isn’t that how a company delivers financial performance? By making a positive contribution to society? Apple, Nike, General Electric … BlackRock itself: these companies do things that society values. They make a positive contribution. And that’s why they are rewarded financially. Just saying. What Fink really means is that companies must “serve a social purpose”. They must “respond to broader societal challenges”. That’s a big ask. To respond to a societal challenge is not some sideshow. It’s a full...
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