Experts say the CEO of BlackRock’s shareholder letter was a masterclass in corporate communication. Here’s what it did well, and how it could have been even better.

Larry Fink

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On Wednesday, BlackRock CEO Larry Fink sent out his annual letter to shareholders, giving us an inside look at the firm’s goals. BlackRock is the world’s biggest asset manager, with $8.7 trillion assets under management.

In the letter, Fink reflects on the events of the past year. He called on the government to play an active role in achieving a net-zero economy by removing the same amount of greenhouse gas that we’re producing, reiterated BlackRock’s commitments to become a driving force in the retirement and sustainability space, and acknowledged that the firm needs to boost diversity, equity, and inclusion. 

Shareholder letters, like Fink’s, can give you a better sense of a leader’s long-term thinking, said Gregory Miller, a professor at University of Michigan’s Ross School of Business and a researcher in investor relations. 

“Now companies are being asked to play a larger role in society, and these letters are a way for CEOs to communicate their broader vision and strategy for the firm,” Miller said. 

But these letters are also hard to perfect. Only a handful of high-profile CEOs, such as Berkshire Hathaway’s Warren Buffett and JPMorgan’s Jamie Dimon, still manage to write insightful shareholder letters.

Insider spoke with Miller and LaToya Evans, a communications and PR expert who’s worked with corporations like IBM and Bank of America, to get their thoughts on Fink’s letter. They shared what worked and what didn’t. 

He reminds shareholders of BlackRock’s long-term mission. 

Fink’s letter is effective because he’s showing progress toward achieving BlackRock’s long-term goals, Miller said.

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Consistency is incredibly important in financial communications, because it gives outsiders a clear sense of who you are as a company, he added. If you’re constantly changing your objective or your long-term goals, outside stakeholders are going to have a hard time deciding whether they’d want to invest in you.

For example, BlackRock has been working to get more people to invest in retirement savings. In 2018, it partnered with Microsoft to build a product that aimed to make retirement saving as easy as calling an Uber. In this year’s letter, Fink noted nearly 50% of Americans have no retirement funds, and he announced further commitments to address the crisis. 

BlackRock’s commitments to sustainability, and environmental, social and governance (ESG) factors aren’t new either. Fink has been discussing this his letters to clients, CEOs, and shareholders for years, Miller added. In this year’s memo, the executive urged government bodies to play a bigger role.

“Every level of government working in partnership with the private sector is required to ensure a just transition that protects people’s livelihoods, vulnerable communities and developing nations,” he wrote.

“He’s basically showing you the evolution of his company,” Miller said. “From his standpoint, the company is still headed toward the same direction. If you read through all of his letters, you’d be able to see how far BlackRock has come, and progress they made each year to get to where they are.” 

He holds the company accountable. 

In recent weeks, BlackRock faced several allegations of …read more

Source:: Businessinsider – Finance


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