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The Quick Facts
- 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)?