Last week, Larry Fink - the founder of the $6.3 trillion asset manager BlackRock - sent a letter that called on S&P 500 CEOs to articulate their societal impact and to explain how they would evolve in the pursuit of long-term, sustainable growth.
Fink's letter has reportedly been a big topic of conversation at the World Economic Forum in Davos, an annual summit that brings together the top business leaders, politicians and economists in the world.
Fink's letter reflects a much broader debate that has gripped business theorists for years: Do businesses primarily have a duty to maximize shareholder returns (shareholder theory), or should shareholders' financial interests be balanced with the interests of employees, customers and the community (stakeholder theory)?
Food For Thought
Do businesses have societal obligations beyond maximizing shareholder value?