What if most macro money managers — and corporate top managements — thought like Laurence D. Fink, “the world’s largest investor”?
Mr. Fink, co-founder and CEO of Black Rock — which has some $4.6 trillion of assets under management — yesterday urged 500 chief executives and their boards to base financial reporting on “a strategic framework for long-term value creation'” that could extend to multiple years, according to The New York Times.
Mr. Fink advocates realistic — long term — context for quarterly and annual reports: He is pushing for companies to consider environmental, social and governance issues “ranging from climate change to diversity to board effectiveness … These issues offer both risks and opportunities, but for too long, companies have not considered them core to their business — even when the world’s political leaders are increasingly focused on them, as demonstrated by the Paris climate accord.”
The Times also reported that “Black Rock, along with mutual fund giants like [sic] Fidelity Investments and T. Rowe Price, recently held a meeting with Warren E. Buffet at the invitation of JP Morgan Chase’s chief executive, Jamie Dimon, to devise a series of voluntary standards that companies should adopt … Another meeting is planned for next month. The discussion of short termism on Wall Street has also become part of the presidential campaign.”
Support by such financial and political heavy hitters may well add heft and stimulus to the short term/long term debate on corporate transparency and accountability. Central to this core dialogue is the rationale for corporate “integrated reporting/integrated thinking” championed by the International Integrated Reporting Council — “a diverse coalition including business leaders and investors to drive a global revolution in corporate reporting”.