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Employees need to understand and connect with your purpose and when they do, they can be your staunchest advocates. Putting your company’s purpose at the foundation of your relationships with your stakeholders is critical to long-term success. They don’t want to hear us, as CEOs, opine on every issue of the day, but they do need to know where we stand on the societal issues intrinsic to our companies’ long-term success. The stakeholders your company relies upon to deliver profits for shareholders need to hear directly from you – to be engaged and inspired by you. Your company’s purpose is its north star in this tumultuous environment. It’s never been more essential for CEOs to have a consistent voice, a clear purpose, a coherent strategy, and a long-term view. That is why your voice is more important than ever. Employees are increasingly looking to their employer as the most trusted, competent, and ethical source of information – more so than government, the media, and NGOs. In this environment, facts themselves are frequently in dispute, but businesses have an opportunity to lead. They may hijack your brand to advance their own agendas. Political activists, or the media, may politicize things your company does. This polarization presents a host of new challenges for CEOs. Most notably, it’s dramatically accelerating how technology is reshaping life and business. Innovative companies looking to adapt to this environment have easier access to capital to realize their visions than ever before. And the relationship between a company, its employees, and society is being redefined.ĬOVID-19 has also deepened the erosion of trust in traditional institutions and exacerbated polarization in many Western societies. It’s creating new businesses and destroying others.

It’s changing how people work and how consumers buy. The pandemic has turbocharged an evolution in the operating environment for virtually every company. Make no mistake, the fair pursuit of profit is still what animates markets and long-term profitability is the measure by which markets will ultimately determine your company’s success.Īt the foundation of capitalism is the process of constant reinvention – how companies must continually evolve as the world around them changes or risk being replaced by new competitors. It is through effective stakeholder capitalism that capital is efficiently allocated, companies achieve durable profitability, and value is created and sustained over the long-term.

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In today’s globally interconnected world, a company must create value for and be valued by its full range of stakeholders in order to deliver long-term value for its shareholders. 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. It is not a social or ideological agenda. Stakeholder capitalism is not about politics. This is the foundation of stakeholder capitalism. Time and again, what they all share is that they have a clear sense of purpose consistent values and, crucially, they recognize the importance of engaging with and delivering for their key stakeholders. Over the past three decades, I’ve had the opportunity to talk with countless CEOs and to learn what distinguishes truly great companies. When my partners and I founded BlackRock as a startup 34 years ago, I had no experience running a company. I write these letters as a fiduciary for our clients who entrust us to manage their assets – to highlight the themes that I believe are vital to driving durable long-term returns and to helping them reach their goals. That is why, for the past decade, I have written to you, as CEOs and Chairs of the companies our clients are invested in. It is a long-term endeavor, and we take a long-term approach. The financial security we seek to help our clients achieve is not created overnight. The majority of our clients are investing to finance retirement. Each year I make it a priority to write to you on behalf of BlackRock’s clients, who are shareholders in your company.

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