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Kalanick's payday shows there's no “evolution in corporate America”

By Sarah Lacy , written on January 19, 2018

From The Travis Shrugged Desk

On Tuesday, CEOs from some of the world’s largest companies got a letter from Laurence Fink, the founder and CEO of BlackRock. The message, according to the New York Times: You need to contribute to society not just make money if you want our backing.

From the Times:

Mr. Fink has the clout to make this kind of demand: His firm manages more than $6 trillion in investments through 401(k) plans, exchange-traded funds and mutual funds, making it the largest investor in the world, and he has an outsize influence on whether directors are voted on and off boards.

“Society is demanding that companies, both public and private, serve a social purpose,” he wrote in a draft of the letter that was shared with me. “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”

It may be a watershed moment on Wall Street, one that raises all sorts of questions about the very nature of capitalism. “It will be a lightning rod for sure for major institutions investing other people’s money,” said Jeffrey Sonnenfeld, a senior associate dean at the Yale School of Management and an expert on corporate leadership. “It is huge for an institutional investor to take this position across its portfolio.‘‘ He said he’s seen “nothing like it.’’ 

On Thursday, Softbank’s investment in Uber was finalized. Travis Kalanick-- a CEO who allegedly stole trade billions in secrets, obtained health records of a woman raped using his service, was fired for creating a toxic environment, amid a laundry list of other horrible actions-- became a billionaire, and every investor who abetted his behavior was rewarded.

Dan Primack Tweeted it best:

There is no “evolution in corporate America” as the Times piece hoped two days earlier, when corporate America’s largest engine for growth still rewards the most corrupt actors the most. There’s at best a disconnect between actors like BlackRock and those like Softbank and Uber. At worst, there’s stunning hypocrisy.