BlackRock CEO Larry Fink warned CEOs on Tuesday that the world's largest asset management firm will vote against incumbent directors if BlackRock clients' long-term interests are not protected.
"These clients, the vast majority of whom are investing for long-term goals like retirement or a child's education, are the true owners of these companies," Fink said in his annual letter to S&P 500 CEOs.
"As a fiduciary, I write on their behalf to advocate governance practices that BlackRock believes will maximize long-term value creation for their investments."
When the long-term interests aren't considered, he added, "we do not hesitate to exercise our right to vote against incumbent directors or misaligned executive compensation."
Fink said assumptions held only a year ago have been capsized by Brexit, trouble in the Middle East and by President Donald Trump.
"At the root of many of these changes is a growing backlash against the impact globalization and technological change are having on many workers and communities," said Fink, a member of Trump's strategic and policy forum.
Still, he said: "I remain a firm believer that the overall benefits of globalization have been significant and that global companies play a leading role in driving growth and prosperity for all."
Trump's unexpected Nov. 8 victory was sparked in part by a focus on creating new jobs for American workers and protecting U.S. manufacturing.
Fink, whose company has $5.1 trillion in assets under management, said there is little doubt globalization's benefits have been shared unequally. Globalization has at times favored highly skilled workers, particularly in urban areas, he said.
"On top of uneven wage growth, technology is transforming the labor market, eliminating millions of jobs for lower-skilled workers even as it creates new opportunities for highly educated ones," he said.
Fink said Trump's plan to invest in infrastructure to add jobs that automation displaced is a plus but is not a solution to the problem.
Companies must "improve their capacity for internal training and education to compete for talent in today's economy and fulfill their responsibilities to their employees," he said.
Fink urged companies to understand the political and economic changes and adapt their long-term strategies as necessary.
"As BlackRock engages with your company this year, we will be looking to see how your strategic framework reflects and recognizes the impact of the past year's changes in the global environment," he said.