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BlackRock CEO Larry Fink: ‘We need executives in business to start focusing on what is right in the long run.’ (FRED LUM/THE GLOBE AND MAIL)
BlackRock CEO Larry Fink: ‘We need executives in business to start focusing on what is right in the long run.’ (FRED LUM/THE GLOBE AND MAIL)

World’s largest asset manager rails against companies’ short-term thinking Add to ...

In 1999, the company went public. It has grown incredibly fast ever since. It manages money for everyone from retail investors to pension plans. During the financial crisis, the U.S. Treasury hired BlackRock to run assets in the Troubled Asset Relief Program, and the Bank of Greece hired the company to help fix the country’s banking system.

Mr. Fink believes Washington suffers from the same myopia that afflicts business. Politicians are so focused on re-election, there is no time to govern and no incentive to plan beyond the next vote.

“The U.S. economy is going to grow 2.5 to 3 per cent [a year]. If we had a strong Washington that is focused on long-term opportunities for the United States, we’d be growing at 5 per cent right now.”

He remains positive about the United States and American companies. But he thinks things could be a lot better. “I’m optimistic, but you have to be an outspoken person about the issues that need change.”

‘It’s not sexy’

Excellent. Superb.” That’s how Mr. Fink characterizes the reaction he has had from CEOs to his plea for long-term thinking. He has a binder full of about 80 responses, outlining their long-term plans.

That’s in private. So why are more CEOs not speaking up publicly?

“It’s not about the moment. In the media, it’s about the moment. And what I’m talking about is to stop talking about the moment.”

Will he keep pushing? Probably. It’s been a long-term project for him. But at some point, others have to speak up about the issue, even if it doesn’t capture big headlines.

“It’s not sexy. That’s your fault. I’m not going to repeat myself, I have to run a company.”

THE QUOTABLE LARRY FINK:

On why having strong pensions has been a boon for Canada’s economy:

“If you have confidence in your retirement, then you can consume more too. … In Canada, you have some [pension] plans that have done very well and … I think one of the fundamental reasons why Canada has fared better than the United States …[is] there is such a larger component of the Canadian population that, as they near retirement, they don’t have the stresses of having enough money for retirement, because your retirement plans are far stronger than some of the U.S. retirement plans.”

On mandatory pension plans, such as the proposed Ontario pension scheme:

“I am a big fan of mandatory savings plans. I’ve been saying that in the United States. I love what they did in Australia. You turn 16, you get a card. Even if you are working part-time, you are building up a pension plan. … In Australia, when they go into retirement, they are going to have far better certainty. It’s that certainty that allows people to say, ‘You know what, that car is nine years old, it’s time to buy a new car. … I need a new dishwasher, I want to buy a new dress,’ whatever. I have more certainty.”

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