In Annual Letter, BlackRock Chief Says Firm Will Keeping Speaking Out

Over the last 26 years, BlackRock has become one of the biggest investment managers around, with more than $4 trillion under management.

With that much capital at its disposal, the firm plans to use its financial muscle to speak out for investors, its chief writes in the firm’s most recent annual report.

Laurence D. Fink, who serves as the firm’s chairman and chief executive, argues that as a fiduciary for clients, BlackRock must speak out on a variety of issues. And because of its size - its various investment funds are among the biggest shareholders for many of the world’s largest companies - what he has to say carries a substantial amount of weight in corporate America.

Among the key issues he highlights is corporate governance, a topic that has been on the firm’s agenda for some time.

From Mr. Fink’s letter:

To that end, in 2013 we engaged with approximately 1,400 companies on corporate governance, including on social, environmental and ethical issues, and voted at more than 14,000 shareholder meetings in 85 markets to protect and enhance the value of our investments. We believe that direct engagement with management, rather than headline-grabbing public pronouncements, are the most effective way to drive change.

The BlackRock chairman also reiterated that his firm would continue to call for what he argued was shareholder-friendly regulation. While he generally praised new laws that have been passed since the financial crisis, he wrote that rules that clamp down on asset managers instead of financial products could have unintended consequences that may “potentially harm the economy.”

He also argued that state and local governments that were willing to work with private investors could draw in the money needed to help finance sorely needed infrastructure improvements - an area in which the firm has been keen to participate.

This year’s annual letter is not the first time that Mr. Fink has used BlackRock’s position as a sort of bully pulpit. Last month alone, he wrote a letter to the heads of companies in the Standard & Poor’s 500-stock index, urging them to focus on returns that were sustainable over the long term. Popular moves to bolster shareholder gains in the short run, like stock buybacks and dividends, may help out immediately but could threaten future growth.