Surely the Letter to Shareholders is one of the most torpid prose forms in any language.
Written by an organization’s CEO, it precedes the annual financial statements and is written in code. “Losses” become “negative growth.” A “challenging year” means “we’ll soon be broke.” This is why only financial analysts read these Letters, and the rest of us skim them the way we would after taking one hour of instruction in conversational Kazakh before deciphering its national budget.
In fact, for many years the only Letters to Shareholders read by FLUs (Folks Like Us) were those by Warren Buffett, the famed and folksy investor and CEO of Berkshire Hathaway. He wrote his first Letter in 1965 and his latest last year. I highly recommend them because bizarrely they’re written in clear English and are often funny. Bemoaning the many bad deals he’s always pitched, he wrote: “A line from a country song expresses our feeling about new ventures, turn-arounds, or auction-like sales: ‘When the phone don’t ring, you’ll know it’s me.'”
But in the past few years, Buffet has had to give up his monopoly on shareholders’ letters that get read by millions of investment amateurs worldwide. In fact, two other CEOs have butted in, and in doing so, have revived this dying prose form the way podcasting has revived radio. This is especially ironic at a time when our attention spans are shredded and ‘long-form’ anything is given short shrift. Because a Letter to Shareholders can run thousands of words.
The first interloper is Larry Fink, the CEO of Blackrock, the world’s largest money manager with $8.7 trillion in assets. Is that big? Well, Canada’s entire gross domestic product last year was just $1.7 trillion. Fink’s Letter to Shareholders in January 2019 rocked the financial world by saying: “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.”
Back then, which is less than 750 days ago, that idea was revolutionary. Today, it’s Holy Writ for public companies. Then in January of 2020 Fink tossed another bomb at clubby capitalism by saying Blackrock would not invest in companies that “present a high sustainability-related risk,” such as coal producers.
Then this January, with every public company rethinking where it steps with its carbon footprints, he called for all of Blackrock’s thousands of investee companies to be ‘net carbon zero’ by 2050.
Larry Fink carries the biggest stick of all in pronouncing where trillions of dollars will next grow, and he uses the archaic form of a Letter to wield that stick.
Meanwhile, he has a fraternal twin over in the non-profit world who happens to be a great friend of Warren Buffet and is also writing his own Letters to Shareholders, not about specific companies (Buffet), nor about entire markets (Fink), but about the future of the world.
That CEO, of course, is Bill and Melinda Gates. Yes, they’re two people, but like Barack and Michelle Obama, they seem to always act as one. Last week, on its 20th anniversary, they issued the 2021 Annual Letter of the Gates Foundation.
Like Buffett’s and Fink’s, it’s easy to read and it’s long. Its 5,100 words will take half an hour to get through. Yes, an entire half of one hour. But its messages are just as vital and surprising as those other two letter-writers.
Perhaps this is because the Gates Foundation, like Berkshire and Blackrock, has the financial power to actually solve the problems it describes. Let’s not forget, it’s already given $50 billion to charity and it’s largely responsible for wiping out polio entirely.
So, as an avid reader of long-form prose and especially of written things that seek to hold my attention for tens of hours (often called b-o-o-k-s), I’m thrilled that a group of billionaires has decided to foreswear the quick hits of Twitter for the measured joys of letter-writing in making their nuanced arguments to get us out of our complex messes via rational thought and uncommon sense.
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