Larry Fink is not a red carpet regular.
But in boardrooms around the world, his take on corporate purpose and “stakeholder capitalism” — as well as the shares held by BlackRock, the investment giant he leads — reverberate loudly.
And when WWD asked leading fashion chief executive officers who count BlackRock among their largest investors, they sounded many of the same notes.
The rhetoric around business has clearly changed. And even if it will take more time to see just how well words and action sync up, it’s telling that corporate honchos are ready to speak about the broader roles companies play in the world.
That leaders throughout the corporate infrastructure — from big investors to big retailers — are talking about purpose in new ways, they can only reinforce the growing movement to a kinder, gentler approach to business.
“Stakeholder capitalism is not about politics. It is not a social or ideological agenda,” wrote Fink, who is chairman and CEO of BlackRock. “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 said “the fair pursuit of profit is still what animates markets,” but that big changes in how business is done are weeping through.
“The pandemic has turbocharged an evolution in the operating environment for virtually every company,” he said. “It’s changing how people work and how consumers buy. It’s creating new businesses and destroying others.”
Sustainability was also a key theme of Fink’s letter.
“Most stakeholders — from shareholders, to employees, to customers, to communities and regulators — now expect companies to play a role in decarbonizing the global economy,” he wrote.
To navigate it all, Fink advised the CEOs and companies to be guided by their own mission or 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,” he wrote.
The pressure is different than what we seeing being brought by the activists who are pushing retailers to spin off their e-commerce businesses or sell their real estate. It’s less directed, but broader, more focused on nudging business to not just boost profits next quarter, but to think about how they can still be around when Gen Z retires.
Here, three key industry CEOs respond to Fink’s latest missive.
Chairman and CEO, Macy’s Inc.
BlackRock stake: 15.3 percent (Macy’s largest institutional shareholder)
“To drive success at Macy’s Inc., we foster colleague engagement and focus on their well-being so that they can bring their best and authentic selves to work every day. Investing in talent and creating an environment where everyone feels heard has been a major focus for our leadership team. Colleagues’ needs are different today than in the past, and we continually listen and learn to make sure we support them appropriately. To that end, we have taken steps to provide competitive and equitable pay, debt-free education and advancement opportunities, as well as new ways to support their total well-being. Our commitment to colleague engagement has never been stronger, and we are energized by a 90 percent engagement rate in our companywide colleague survey. Acting on our colleagues’ feedback is key to better serving our customers and ultimately delivering greater value to our shareholders.”
CEO, PVH Corp.
BlackRock stake: 6.6 percent
“Having a positive impact with what you do as a company is a must have going forward. We are building the next growth chapter for PVH, and the core of our multiyear growth plan is to win with the consumer in a way that is aligned with our company purpose to power brands that drive fashion forward for good. This purpose has guided us as a company for years, and it has never been more relevant in making a real difference with inclusion and diversity, sustainability and strong governance.”
President and CEO, Kontoor Brands Inc.
BlackRock stake: 13 percent
“As we head into the third year of the pandemic, the environment in which we are all operating is changing significantly. Every stakeholder is important, but employees must come first if a company wants to fulfill its purpose. Employees’ expectations have shifted dramatically and we as employers must respond. At Kontoor, we take care of one another and we’re in it for the long run.”
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