Tag Archives: corporate recklessness

The Curious Case of Larry Fink, BlackRock: He Stays, They Go

Few private citizens wield more power in America today than Larry Fink, the chief executive of BlackRock in pushing companies to embrace climate-friendly policies, that has made him a lightning rod. The firm he runs manages some $10 trillion for pension funds, endowments, governments, companies and individuals, equal to more than 10% of the world’s gross domestic product in 2020. As steward for millions of investors, BlackRock wields vast shareholder voting power, which it uses either to back managements or to prod them in new directions.

Today, Mr. Fink is telling CEOs that companies must prepare for a scale back of fossil fuels, and that the private sector should work with governments to do so. He warns of the disruption climate change could cause both the economy and financial markets, but sees historic investment opportunity in the energy shift. It’s a point he has made to conferences in Davos, Venice, Riyadh and Glasgow over the past year. Mr. Fink’s power, combined with his advocacy on a hot-button issue, has made him a flashpoint for activists, politicians and unions, both those who think BlackRock isn’t doing enough and others who say it’s doing too much…

U.S. government officials have called on Mr. Fink to help them cope with crises—the pandemic-rattled financial markets in March 2020, and, during the 2008 financial meltdown. “Treasury Secretaries and finance ministers come and go,” said David Rubenstein, the co-founder of the private-equity firm Carlyle Group Inc. “They work for someone else who can fire them tomorrow and have to build what others want them to. When you are the CEO of the biggest asset manager, you don’t have to do that.”

Excerpts from Dawn Lim Follow, Larry Fink Wants to Save the World (and Make Money Doing It), Jan. 6, 2022

BP: Culture of Corporate Recklessness

The Obama administration has accused BP of gross negligence and willful misconduct in causing the Deepwater Horizon oil spill of 2010. In a new court filing, the Department of Justice appears bent on blaming BP for the worst oil disaster in U.S. history.  The court document blasts BP’s leadership in no uncertain terms. Referring to “A Culture of Corporate Recklessness,” it states that “The behaviour, words and actions of these BP executives would not have been tolerated in a middling size company manufacturing dry goods for sale in a suburban mall.” It criticizes “the utter lack of any semblance of investigation of the systemic management causes deeply implicating the corporate managers and leadership who caused and allowed the rig-based mechanical causes to fester and ultimately explode in a fireball of death, personal injury, economic catastrophe, and environmental devastation.”

Referring to a “negative pressure test” performed by BP and Transocean hours before the blowout, the report states, “That such a simple, yet fundamental safety-critical test could have been so stunningly, blindingly botched in so many ways, by so many people, demonstrates gross negligence.”  The designation of “gross negligence” under the Clean Water Act, is an important distinction because it would mean the company could face $21 billion in civil damages alone—almost quadruple the penalty if “gross negligence” is not confirmed. BP also faces criminal charges.

The case may not go to trial, which is scheduled to begin January 14. Both sides are negotiating to reach a settlement to resolve both civil and criminal violations.  The Justice Department reportedly sought a $25 billion agreement from BP, but now may be willing to settle for $15 billion.

Justice Dept. Accuses BP of “Gross Negligence” over Gulf Oil Spill, AllGov.com, Sept. 7, 2012