The old work world is gone, writes Larry Fink, the biggest investor on the planet, in his closely read letter to CEOs, released on Monday night.
Driving the news: Used to be that companies could expect employees to come to the office five days a week, neglect workers' mental health and keep wages low for those at the lower end of the income scale, writes Fink, who is the chief executive of BlackRock. Not any longer.
Why it matters: Fink's annual letter — addressed to the CEOs of the businesses BlackRock invests in, e.g., most big companies — wields enormous influence.
- BlackRock manages an astonishing $10 trillion for individuals and institutional investors like pension funds and university endowments — that's more than 10% of the world's gross domestic product, the WSJ recently pointed out.
- Fink is the most influential executive to acknowledge that workers are wielding more power in the post-pandemic era; he points to rising wages and rising quit rates in the letter.
What he's saying: "No relationship has been changed more by the pandemic than the one between employers and employees. CEOs face a profoundly different paradigm than we are used to."
The big picture: Since 2018, Fink's letters to CEOs have highlighted the buzzy term "stakeholder capitalism," the notion that public firms shouldn't simply be looking to maximize profits but should do more for their workers and society, too.
- The term is not "woke," he writes in this year's letter, perhaps as a rebuke to Republican senators like Pat Toomey, who have decried efforts by CEOs to address racial discrimination and climate change.
- "It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper." (emphasis Fink's).
Flashback: For the past couple years, Fink's used his annual letter to push companies to respond to the risks of climate change.
- In his 2021 missive he said he'd already begun to vote against managers and directors who don't show progress in this area, as Axios' Felix Salmon wrote.
On the flip side: A book called "Davos Man," out Tuesday from New York Times global economist correspondent Peter S. Goodman, says stakeholder rhetoric from billionaires, including Fink, obscures the way he and a certain class of super-rich CEO have pillaged the global economy.
