The recent letter from Blackrock’s Larry Fink to CEOs just may have upped the ante on our current thinking about sustainability.
While the phrase “triple bottom line” has been in mainstream conversation for several years now and always sounds good in theory, in practice the concept remains a bit elusive for many companies. Social responsibility initiatives are often something pursued when times are good and there is ample staff and budget to focus on it. Or, it is pursued in a prescriptive way to fix visible cracks in the foundation. But triple bottom line thinking does not always make the list of priorities even though it should, because it not only helps organizations tell better stories, but helps them be more resilient, too.
In the letter, Fink calls upon companies not just to be good corporate citizens for themselves and their shareholders but to help solve our biggest societal challenges, such as low wage growth and inadequate retirement systems – two items he believes are spurring the polarization we are experiencing among ourselves today.
In the letter he explains the company’s plan for expanded shareholder engagement initiatives because “engagement needs to be a year-round conversation about improved long-term value.” With that one line, Fink has served up on a silver platter a formula for reputation management that just might make every Chief Communications Officer jump for joy.
It’s brilliant in its simplicity:
- Articulate your strategy for long-term growth.
- Achieve financial performance, but understand the societal impact of your business.
- Be aware that legislative and regulatory developments will affect your company.
- Be open to meaningful dialog, even with activists.
- Recognize the Board of Directors as ambassadors essential to helping a company articulate its value.
Nearly every communicator has spoken these, or similar, words to a C-suite at some point. But it is rare that a chief executive takes the opportunity to articulate corporate reputation best practices in this way so directly.
There are some who ask why this letter appeared now. Maybe it is a “good economy” moment – unemployment is lower, GDP is growing and companies can and should step back and reflect on these and larger issues. Maybe the introspection will fall by the wayside the next time we are faced with a downturn or a catastrophic event.
That aside, we do know a few things for certain: Technology will continue to disrupt. Economies are cyclical. And for now, companies still answer to a large number of stakeholders – customers, employees, boards of directors, shareholders and regulators. Companies who want to tell their full story and engage in a meaningful, compelling, transparent and mutually beneficial way with their stakeholders would do well to use the Blackrock letter as a reference guide.
Focusing on this multi-stakeholder, long-view storytelling approach allows anyone, for the most part, to endure changes large and small. The challenge is always focusing long haul narrative, even when it’s tempting to focus on the short-term easy win.
Meghan Gross is a Vice President at Pierpont Communications with more than 25 years of experience in corporate communications, reputation management, employee engagement and crisis communication. Based in the Eastern Corridor, Gross has worked with large companies in Boston, legal and other professional services firms in New York, associations in Washington, DC and more.