The Backlash to Larry Fink's Letter Shows How Far Business Has to Go on Social Responsibility

Larry Fink, CEO of BlackRock, the world’s largest investor with $6 trillion under management, evoked heated controversy with his remarks last week that his company would change its hiring and potentially its compensation structure to advance diversity and ensure that five years from now the company is not just “a bunch of white men.” This follows on the heels of his annual letter to CEOs asserting that companies need to embrace a purpose beyond just profit maximization. Critics, according to Fox Business, were swift to accuse Fink’s commitment to diversity as a form of “corporate socialism,” complaining about “the propriety of a public company executive using business resources and his perch as CEO to advance a personal agenda.” It seems one get criticized whenever race is raised as an issue, whether ignoring or promoting diversity. But who is better positioned to lead their firm into the future — the law firm that is perpetuating white male leadership or the investment firm that is disrupting its management by making a serious commitment to diversity? It’s time to stop pretending that business somehow exists in a vacuum that neither affects nor depends on the wellbeing of our society.