BlackRock: Linking Purpose to Profit
The case revolves around the actions that Barbara Novick, co-founder and Vice-Chair of Blackrock, and Michelle Edkins, Global Head of Investment Stewardship, would need to take in response to the controversial CEO letters from Laurence (Larry) Fink, Chairman and CEO of BlackRock. Fink’s letters focused on the importance of corporate purpose and investing considering environmental, social, and governance (ESG) issues. The case also discusses Blackrock’s plans for a new model of shareholder engagement to help drive the changes proposed in the letters. The case presents the opportunity to discuss the governance role played by major institutional investors as well as how the responsibilities and actions of one large investor, BlackRock, should evolve in this role going forward. It is not clear whether BlackRock should play such a role and, if so, whether they have the ability to enforce corporate compliance and to carry out this role given they are primarily an index investor. The case is likely to generate spirited debate about the merits of BlackRock’s pronouncements and the importance of corporate investments in ESG themes and allow for discussions on measurement and disclosure strategies that can judge progress on these dimensions.
Keywords: boards of directors; Institutional investors; disclosure; transparency; corporate purpose; Corporate profits; ESG; ESG disclosure metrics; corporate sustainability; engagement strategy of institutions; stewardship role of institutions; Corporate Governance; Governing and Advisory Boards; Institutional Investing; Accounting; Corporate Disclosure; Mission and Purpose; Profit; Environmental Sustainability; Climate Change; Diversity; Corporate Accountability;
Citation:
Deshpandé, Rohit, Aiyesha Dey, and George Serafeim. "BlackRock: Linking Purpose to Profit." Harvard Business School Case 120-042, January 2020. (Revised July 2020.) View Details