Fink promises cultural change at BlackRock after discrimination allegations
BlackRock’s chief executive Larry Fink said the asset manager was aiming to “reset behavioural expectations” across the company as it deals with a series of allegations about discrimination and sexual harassment.
In his annual letter to shareholders, Fink said he recognised the need to improve the company’s diversity and inclusion and admitted that BlackRock’s culture was “not perfect”.
“A high-performance culture also requires diversity, empathy, equity, respect and inclusion,” he said.
BlackRock, the world’s largest asset manager, last month announced an internal review into reports of employee misconduct after allegations of discrimination and sexual harassment were reported by the Financial Times. The law firm of Paul, Weiss, Rifkind, Wharton & Garrison is conducting the review.
“I know our culture is not perfect,” Fink said on Wednesday. “It depends on the contribution of 16,500 individuals. And in some cases, certain employees have not upheld BlackRock’s standards.”
BlackRock, which manages $8.7tn of assets, has pushed hard for companies in its investment portfolios to become good corporate stewards and serve all their stakeholders rather than just focus on rewarding shareholders.
“Just as we ask of other companies, we have a long-term strategy aimed at improving diversity, equity and inclusion at BlackRock,” Fink told shareholders.
“Our strategy includes: mitigating bias in our hiring and talent management practices; providing professional development, sponsorship and executive coaching opportunities; raising awareness of [diversity, equity and inclusion] matters; and resetting behavioural expectations across the organisation.”
Fink also used his letter to reaffirm BlackRock’s commitment to fight climate change by pushing its investee companies to cut their carbon emissions to net zero by 2050. But Fink said that BlackRock’s power to change the world only goes so far.
Global regulators need to work together to established harmonised disclosure standards for public and private companies and provide temporary legal immunity “to shield companies from liability as long as they make a best effort at representing material risks,” Fink said.
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“Government . . . must play the leadership role in addressing this crisis: setting standards, creating the right incentives, putting a price on carbon and investing in the technology and infrastructure required for the energy transition,” he said.
Fink told shareholders that BlackRock was focused on long-term objectives that include expanding their role in private markets and their business in China catering to both domestic and international investors.
Shares in BlackRock closed at a record high on Monday and are up 8.4 per cent so far this year. In contrast, the S&P Asset Manager index has risen 13.8 per cent and BlackRock has lagged the performance of the other seven members so far this year.