The imperatives of corporate governance: A letter to CEOs

EACH year, I write to the chief executive officers (CEOs) of leading companies in which our clients are shareholders. These clients, the vast majority of whom are investing for long-term goals such as retirement or a child's education, are the true owners of these companies. As a fiduciary, I write on their behalf to advocate governance practices that BlackRock believes will maximise long-term value creation for their investments.

Last year, we asked CEOs to communicate to shareholders their annual strategic frameworks for long-term value creation and explicitly affirm that their boards have reviewed those plans. Many companies responded by publicly disclosing detailed plans, including robust processes for board involvement. These plans provided shareholders with an opportunity to evaluate a company's long-term strategy and the progress made in executing on it.

Over the past 12 months, many of the assumptions on which those plans were based - including sustained low inflation and an expectation for continued globalisation - have been upended.