Society is demanding that companies serve a social purpose

AS BlackRock approaches its 30th anniversary this year, I have had the opportunity to reflect on the most pressing issues facing investors today, and how BlackRock must adapt to serve our clients more effectively. As a fiduciary, BlackRock engages with companies to drive the sustainable, long-term growth that our clients need to meet their goals.

In 2017, equities enjoyed an extraordinary run - with record highs across a wide range of sectors - and yet popular frustration and apprehension about the future simultaneously reached new heights. We are seeing a paradox of high returns and high anxiety. Since the financial crisis, those with capital have reaped enormous benefits. At the same time, many individuals across the world are facing a combination of low rates, low wage growth, and inadequate retirement systems. Many do not have the financial capacity, the resources or the tools to save effectively; those who are invested are too often over-allocated to cash. For millions, the prospect of a secure retirement is slipping further and further away - especially among workers with less education, whose job security is increasingly tenuous. I believe these trends are a major source of the anxiety and polarisation that we see across the world today.

We also see many governments failing to prepare for the future, on issues ranging from retirement and infrastructure to automation and worker retraining. As a result, society increasingly is turning to the private sector and asking that companies respond to broader societal challenges. Indeed, the public expectations of your company have never been greater. Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all their stakeholders - including shareholders, employees, customers and the communities in which they operate.