![]() ![]() In many ways, the idea this work led to our first ebook, The Ultimate Guide to Startup Data Distribution. Components of long-term compensation should be linked to these metrics.Ĭompany and business-model specific metrics are things that we spend a ton of time working with companies to build. As part of this effort, companies should work to develop financial metrics, suitable for each company and industry, that support a framework for long-term growth. This perspective on the future, however, is what investors and all stakeholders truly need, including, for example, how the company is navigating the competitive landscape, how it is innovating, how it is adapting to technological disruption or geopolitical events, where it is investing and how it is developing its talent. BlackRock’s corporate governance team, in their engagement with companies, will be looking for this framework and board review.Īnnual shareholder letters and other communications to shareholders are too often backwards-looking and don’t do enough to articulate management’s vision and plans for the future. Additionally, because boards have a critical role to play in strategic planning, we believe CEOs should explicitly affirm that their boards have reviewed those plans. ![]() We are asking that every CEO lay out for shareholders each year a strategic framework for long-term value creation. This guest post from Wagepoint’s Leena Thampan is a great place to start if you want to understand the benefits (and pitfalls) of business transparency. We also believe that companies have an obligation to be open and transparent about their growth plans so that shareholders can evaluate them and companies’ progress in executing on those plans.Īs a company, we have thought a ton about the value of transparency for early stage businesses. Dividends paid out by S&P 500 companies in 2015 amounted to the highest proportion of their earnings since 2009. While we’ve heard strong support from corporate leaders for taking such a long-term view, many companies continue to engage in practices that may undermine their ability to invest for the future. Reducing these pressures and working instead to invest in long-term growth remains an issue of paramount importance for BlackRock’s clients, most of whom are saving for retirement and other long-term goals, as well as for the entire global economy. Over the past several years, I have written to the CEOs of leading companies urging resistance to the powerful forces of short-termism afflicting corporate behavior. If you like what you see and want to share Visible Investor Letters with friends or colleagues, send them here to sign up. ![]() In sharing advice with CEOs of some of the largest companies in the world, Fink touches on transparency, company-specific metrics, and the idea of getting key stakeholders aligned on where the business is heading – all things that are useful to businesses of any size and stage.Īll of the charts, images, quotes, and emphasis below were added by us. Instead of a CEO updating shareholders on the present and future of the business, this missive – from BlackRock’s Larry Fink – features a CEO sharing insight (and some harsh realities) with other CEOs…ones he and his firm have invested in. Today’s letter takes a slightly different approach than most in the past. ![]()
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