The One Open Letter All Business Leaders Should Read
In an open letter to the chief executives at S&P 500 companies and large European organisations, Larry Fink, the chief executive at BlackRock, the world’s biggest investor with $4.6 trillion, puts the case for taking the long term view in terms of environmental, social and governance (ESG) issues.
‘Short-termism’, as he calls it, is an ‘affliction’ that threatens both the long-term goals of investors and the entire global economy. And taking a long term view isn’t just an abstract ideal — it has to be laid out in terms of very concrete goals, says Fink: “We believe CEOs should explicitly affirm that their boards have reviewed those plans,” he states, adding: “BlackRock’s corporate governance team, in their engagement with companies, will be looking for this framework and board review.”
In other words, it’s no more lip-service to ESG — wise investors are going to insist on it as part of the rubric for appraising the value of companies they invest in.
Read the letter on Business Insider – it’s not too long, about 6 minutes to read, but great food for thought.