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The Warning from on High: Why Charlie Munger Didn’t Want Larry Fink as His ‘Emperor’
In a world of rapidly concentrating financial power, the late, great Charlie Munger—Warren Buffett’s long-time business partner and a legendary investor in his own right—once issued a stark, headline-grabbing warning. The focus of his concern was the gargantuan asset manager BlackRock and its influential CEO, Larry Fink. Munger’s memorable quote didn’t mince words: “I think the world of Larry Fink, but I’m not sure I want him to be my emperor.”
Munger, who passed away in late 2023, voiced his concerns back in 2022 during a shareholder meeting for the Daily Journal Corporation. His critique wasn’t personal; it was aimed at a systemic shift in the financial landscape: the quiet but enormous rise of passive investing.
The Power of the Passive Empire
Passive investing, where funds track a market index rather than picking individual stocks, has been a boon for everyday investors. It is inexpensive, diversified, and generally outperforms many actively managed strategies. But Munger pointed out the unintended consequence: it funnels immense voting power into the hands of just a few firms, primarily the “Big Three”: BlackRock, Vanguard, and State Street. Because BlackRock’s funds, like its popular iShares ETFs, own a slice of nearly every major public company, its executives effectively cast votes on behalf of millions of small investors.
And BlackRock’s power has only continued to swell. As the world’s largest asset manager, the firm has seen its assets under management (AUM) surge to approximately $13.5 trillion as of the third quarter of 2025, which represents an incredible concentration of capital and influence.
The ESG Debate: A New Agenda?
Munger’s deepest reservation stemmed from how this power was being wielded. He cautioned that “we have a new bunch of emperors, and they’re the people who vote the shares in the index funds.” The crux of the matter, according to critics, is the increasing use of this shareholder voting power to push Environmental, Social, and Governance (ESG) standards onto companies.
Larry Fink is a vocal proponent of stakeholder capitalism, the idea that a company’s obligations extend beyond maximizing shareholder value to include societal issues. However, Munger and others worried that this ESG push amounted to BlackRock executives—and not the individual, underlying investors—deciding a company’s business practices. This raised questions about whether the firm was using client assets to pursue a social or political agenda, potentially sacrificing “portfolio primacy” for what one academic called an “economic good of the investment adviser.”
In his annual letters, Fink has defended the firm’s approach, arguing that embracing sustainability is simply a fiduciary duty to bring private capital toward a net-zero future and to manage long-term risks.
The Enduring Question of Influence
The debate Munger ignited remains central to modern finance. As BlackRock continues to evolve, expanding into new areas like its successful bitcoin ETF and other alternative investments, its influence over global markets and corporate boardrooms only deepens. The crucial question Munger posed—who truly controls corporate America when a handful of index fund managers hold so much sway—is more relevant than ever. His prophetic warning about “emperors” serves as a powerful reminder for every investor to consider not just where their money is going, but who is casting the vote on their behalf.
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