A memorable phrase by Nobel economist Milton Friedman has for almost 50 years encapsulated the mission of private enterprise in America: “The social responsibility of business is to increase its profits.”
A letter sent to corporate executives this week by BlackRock Chief Executive Officer Laurence D. Fink may have the effect, intentional or not, of kneecapping Friedman’s dictum. Fink, 65, offers “a new model of shareholder engagement,” in which investors and managers, through continuous dialog, help companies align their interests with society’s rapidly changing needs.
