Larry Fink, CEO of Blackrock, says the relationship between workers and companies has revolutionized during the pandemic.
World CEO of Blackrock, the largest treasurer Larry Fink calls on business leaders to take seriously the changes in the relationship between workers and companies caused by the pandemic.
According to Fink, the change in the operating environment of companies has progressed at a turbo pace in the past two years.
“The fact that employees demand more from their employers is an essential feature of effective capitalism. It generates wealth and increases competition for talent. It drives companies to create a better and more innovative environment for their employees, ”he writes.
And all of this, according to Fink, will ultimately benefit shareholders because companies that have succeeded in doing so have suffered from lower labor turnover and made better results throughout the epidemic.
“Companies that don’t adapt to the new reality and don’t meet the new demands of their employees, on the other hand, are at risk,” Fink writes.
High staff turnover increases costs, lowers productivity and erodes the company’s culture and collective memory.
Finkin according to CEOs need to be considerate in how they use their own voice and how they respond to social issues that are important to employees.
Fink in the US also sees opportunities in the change. He believes that business leaders can now also be significant opinion leaders in their work community.
“In the current environment, there is more and more controversy even over what is a fact. It creates an opportunity for companies to lead. Employees increasingly see their employer as a more reliable, competent and ethical source of information than the administration, the media or NGOs, ”Fink writes.
According to Fink, customers are also increasingly interested in the value base of companies and their management.
“They want to know what you’re standing behind.”
Fink writes a letter each year to the CEOs of Blackrock’s investments. In practice, the list covers a large portion of the world’s largest listed companies, with Blackrock already managing about $ 10 trillion in funds, mostly from institutional investors.
In Finland, too, Blackrock’s funds are significant owners of many large companies.
In practice, Blackrock exercises great power in corporate governance because it engages in active dialogue with corporate management to advance the goals it sets. Blackrock also participates in the voting of corporate general meetings.
For example, Blackrock has long demanded concrete climate targets from companies. They have been the main content of Fink’s letter in recent years.
This time, he also writes more broadly about the importance of stakeholder relations whether it is the customer, the employee or the society in which the company operates.
Successful companies understand the importance of these relationships, according to Fink, Successful people also have consistent values and a clear purpose.
Even on climate issues Fink is back. Reducing CO2 emissions and the energy revolution have become one of the most important factors driving the distribution of capital and thus the success of companies.
“I wrote two years ago that climate risk is investment risk. In this short time, we have seen the earth-shattering capital shift. A total of $ 4 trillion has now been invested in sustainable investments, ”Fink writes.
However, Fink points out that rapid action has also caused problems. According to him, care must be taken to ensure that energy prices remain at a level that societies can afford.
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