Larry Fink, chief executive officer of BlackRock Inc, has sent a letter to the chief executives of the 500 largest publicly listed U.S. companies urging for a long-term approach to creating value for shareholders or risk losing its support.


In a letter sent to the chief executive officers of the Standard & Poor's 500 Index, Fink asks companies to avoid succumbing to the short-term pressures created by the increase in activist shareholders in recent years.

"It is critical... to understand that corporate leaders' duty of care and loyalty is not to every investor or trader who owns their companies' shares at any moment in time, but to the company and its long term owners," Fink wrote in the letter, dated March 31.

BlackRock is the world's largest asset manager. As of the end of 2014, it had $4.65 trillion of assets under management.

The company made Fink's letter available to Reuters after The New York Times first reported on the document on Monday evening, ahead of the company's scheduled release of first-quarter results on Thursday.

In 2014, dividends and buybacks in the U.S. totaled $900 billion, its highest level ever, according to the letter. Many market analysts expect that a rise in interest rates will not derail the buyback boom that has been bolstering stocks.

Given the low interest rate environment, such moves "send a discouraging message about a company's ability to use its resources wisely and develop a coherent plan to create value over the long-term."

Companies that are committed to long-term shareholders and communicate that strategy "can expect our support," Fink wrote.

Corporate boards should act as "the first line of defense" against short-term pressures, Fink wrote.

For its part, BlackRock has revised its proxy guidelines to highlight it expects board members to protect shareholders against short-term thinking.

And those firms that have articulated a long-term strategy to create shareholder value as well as credible metrics against which to assess performance will have BlackRock's support during periods of underperformance, Fink wrote.

"In such cases, we will take action to ensure that the owners' interest are effectively served," he wrote.