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BlackRock chief dwells on grey areas

Head of world's largest asset manager says companies should think beyond the bottom line to their impact on the broader community

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Mr Fink withdrew last month from a high-profile investment conference in Riyadh, along with executives including Jamie Dimon of JPMorgan Chase, Stephen A. Schwarzman of the Blackstone Group and Dara Khosrowshahi of Uber, over the death of Jamal Khashoggi, a prominent Saudi journalist.

New York

FOR someone who speaks often and boldly about taking a stand, Laurence D. Fink of BlackRock spends a lot of time thinking about grey areas.

Mr Fink, the founder, chairman and chief executive of the world's largest asset manager, said that dropping out of an annual investor conference in Saudi Arabia last month - nicknamed "Davos in the Desert" - was a "hard decision." So was the choice earlier this year to offer investment options stripped of gun manufacturers and retailers.

"These things are not black or white," he said last week.

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In a conversation that also touched on cryptocurrency and tariffs - Mr Fink is worried that the country is headed toward "a full-fledged trade war with China" - he returned repeatedly to the idea of corporate accountability.

BlackRock has US$6.5 trillion under management, giving it unparalleled influence over many of the world's top public companies.

Billionaire investor Warren Buffett has said that he has resisted imposing his political views on his employees and clients because he is "not their nanny on that."

"I'm not a nanny either," Mr Fink said. "I'm not telling companies what their purpose should be. But I do believe it's up to the company to identify what their purpose is."

Waiting to illustrate the point: Edward Stack, chief executive of Dick's Sporting Goods. Mr Stack, who was in the audience at the DealBook conference in New York, is a gun owner and a shooting enthusiast, and he told the room that he was generally seen as a "tough guy." But watching news reports after 17 people died in a shooting at a high school in Parkland, Florida, in February had "a profound effect on me and the people in our company," Mr Stack said.

"I haven't cried as much since my mother passed away," he added. "It was heartbreaking."

Soon after, Dick's announced that it would stop selling assault-style rifles and require any gun buyer to be at least 21.

Mr Stack went to Washington to speak to legislators about gun control. "We'd do it all over again," he said.

Gun policy has become an enduringly divisive issue. After the Parkland shooting, gun safety activists began boycotts against companies deemed sympathetic to the firearms industry; Delta, MetLife and several other businesses dropped deals with the National Rifle Association.

Gun rights supporters quickly responded with their own boycott campaigns. Some companies remain reluctant to make changes in strategy in reaction to shootings.

Earlier last week, FedEx backed out of a marketing arrangement with the NRA, but stressed the decision was unrelated to a gunman's recent rampage at a synagogue in Pittsburgh.

After the shooting in Parkland, BlackRock canvassed its clients across the country and eventually said it would help invest in funds without links to the firearms industry.

The company also asked gun manufacturers for more information about their business practices. It backed a successful shareholder proposal - pushed in part by a group of nuns - demanding that the firearm-maker Sturm Ruger detail its plans to monitor violence associated with its guns.

"We were privately engaged with everyone," Mr Fink said.

This year he issued an open letter pressing public firms to think not just of the bottom line, but also of the broader community - a social responsibility manifesto forged through years of personal experience, public pressure and secret meetings.

In August, he and other business leaders - including Tim Cook of Apple, Jamie Dimon of JPMorgan Chase and Brian Moynihan of Bank of America - denounced the Trump administration's immigration policies.

Mr Fink withdrew last month from the high-profile investment conference in Riyadh, along with executives including Mr Dimon, Stephen A. Schwarzman of the Blackstone Group and Dara Khosrowshahi of Uber.

He said it was inconsistent to be part of "this public showcase" for the kingdom amid allegations that Jamal Khashoggi, a prominent Saudi journalist who was writing columns for The Washington Post, had been murdered and dismembered at a Saudi consulate in Turkey.

But Mr Fink said BlackRock would continue to conduct business in Saudi Arabia, adding that the company had not lost any business from the region after its decision to drop out of the conference.

"If we did lose business because of the decision, then they're not truly the clients we thought they would be," he said. NYTIMES