My cold call is actually I put the students in the shoes of a CEO that is receiving one of those letters. So what are the implications for the board of directors? And set clear strategic direction in the future and a long term perspective for achieving that purpose. The central theme of the case, Brian is the letter from Larry Fink, the CEO and founder of BlackRock, to corporate leaders, CEOs of the largest publicly listed companies, asking them about purpose, and the connection of purpose to profit and what is their purpose to articulate that, establish governance mechanisms around that. Why don't we start with the central theme of the case and what your cold call will be when you have this case in class? And I think this case raises a lot of those questions to the surface about can business really balance, profit and purpose in a meaningful way. We read so often in the headlines about the misdeeds of people in business. So I thought it was a really interesting case. When I asked you to be on the show, I said, "Tell me about a case that will help to surface some of the ideas in your book," and you immediately gravitated to this one. We're going to talk more about your book and the ideas in it. And he is the author of a new book called, Purpose and Profit: How Business Can Lift Up the World. ![]() George Serafeim's research focuses on measuring, driving, and communicating corporate performance and social impact. I'm your host, Brian Kenny, and you're listening to Cold Call on the HBR presents network. Today on Cold Call, we've invited professor George Serafeim to discuss his case entitled, BlackRock: Linking Purpose to Profit. But many suspected we might soon return to business as usual. And it seemed to herald a new day for the role of business in society. It was a clear rebuke of the shareholder primacy that dominated business for decades. The pledge was signed by 181 CEOs who committed to lead their companies for the benefit of all stakeholders, including customers, employees, suppliers, communities, and shareholders. So with that record, it's not surprising that the Business Roundtable pledge of 2019 was met with some skepticism. In subsequent decades, they worked behind the scenes in Washington to promote corporate tax cuts and free trade while scuttling legislation that would've made corporate boards more accountable. The Roundtable became a powerful lobbying group on Capitol Hill, thwarting antitrust and consumer protection legislation and blocking labor reform all within its first five years. It was pretty clear from the get go that those policies would by and large support the interests of business. economy and expanded opportunities for all Americans through sound public policies. A group comprised entirely of CEOs of large corporations, whose purpose was to promote a thriving U.S. On October 13th, 1972, the CEOs of General Electric, US Steel and Alcoa announced the establishment of the Business Roundtable. What role should investors play in urging business leaders to take environmental, social, and governance issues more seriously and enforcing compliance? Harvard Business School professor George Serafeim discusses the merits of Fink’s approach, the importance of corporate investments in ESG themes, and how to lead a company driven by purpose and profit in his case, “BlackRock: Linking Purpose to Profit,” and his new book Purpose and Profit: How Business Can Lift Up The World. But Fink wanted his firm to engage with the companies in which they invest and hold them accountable for their social and environmental impacts. The firm’s success was rooted in its cost-effective, passive investment products that rely more on tracking indices and funds. ![]() Fink is the chairman and CEO of BlackRock, one of the largest asset management houses in the world. In 2014, Larry Fink started writing letters to the leaders of some of the largest publicly listed companies, urging them to consider the importance of environmental, social, and governance (ESG) issues.
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