Do Larry Fink’s annual letters make a difference in the way big corporations do business? One study showed that in firms where Blackrock owned at least 5 percent of the outstanding shares, the company was 22 percent more likely to use language that reflected Fink’s letter in their disclosures to the SEC. So says a study from accounting scholars published last year. My guess is that they are even more influential than that, especially in ways that can’t be so conveniently accounted for. Is it surprising? Perhaps not if you take into account that Fink’s first letter from 2012 stated that one of his intentions was to make proxy advisory firms—the companies, largely hidden from public view, that set the agenda and norms at annual shareholders meetings—less relevant. Here’s what he said ten years ago:
BlackRock’s approach to corporate governance can be described as value-focused engagement. We reach our voting decisions independently of proxy advisory firms on the basis of guidelines that reflect our perspective as a fiduciary investor with responsibilities to protect the economic interests of our clients.