BlackRock Expands Shareholder Voting Capabilities for Investors Outside the U.S.

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  • BlackRock extends voting rights to certain large investors in certain countries outside of the United States.
  • The world’s largest asset manager is under scrutiny for its considerable influence as a shareholder.
  • BlackRock’s global head of ETFs said he expects more investors to vote their own stocks over time.

BlackRock is giving bigger investors like insurance companies and pension funds invested in its products a bigger megaphone in corporate boardrooms.

The New York-based company’s decision, which was announced on Monday, is another step taken by the world’s largest asset manager as it faces criticism from some lawmakers over its influence as an institutional shareholder. Typically, asset managers like BlackRock vote on shareholder proposals on behalf of investors who have purchased their funds.

Last fall, BlackRock said it would give select institutional clients the ability to vote on shareholder proposals themselves starting in January.

This means that more large companies – themselves representing millions of end investors – have the ability to vote as they wish in the companies they are invested in, rather than having BlackRock vote on their behalf.

BlackRock says it is now extending this option to some large investors in Canada and Ireland for the first time, as well as others in the UK. Overall, clients representing 47% of BlackRock’s $4.9 trillion in index-tracking assets worldwide can now vote for their own shares. That’s up from 40% when BlackRock launched the program, called BlackRock Voting Choice.

And BlackRock says investors have so far accepted the asset manager’s $9.6 trillion offer. Customers representing a quarter of eligible assets now say they choose to vote for their own shares, according to BlackRock.

The wide-ranging effort is overseen by executives including chief client officer Mark McCombe, global head of investment management Sandy Boss, and Salim Ramji, who manages exchange-traded funds and index investments in the world.

Customers may have their own internal expertise when considering how to use their votes or have a view on certain issues they want to voice, Ramji told Insider. “It’s their money. They own the assets. If we can make it easy for them, they will,” he said.

“You may have clients who appreciate that we take a long-term view of economic returns, but may have a different investment philosophy,” he said, adding that he expects that more customers choose to vote as they please. time.

power of attorney

The moves to give investors the ability to vote for themselves at shareholder meetings reflect the heavy scrutiny the asset management giant and rivals, including Vanguard and State Street, have had over their wide range of funds. who own significant business chucks on behalf of investors.

“By letting more clients vote their own proxies, BlackRock anticipates any regulatory action that may come sooner or later,” said Hortense Bioy, global director of sustainability research at Morningstar, in a report last October. “There is only a certain concentration of power that policy makers can tolerate.”

BlackRock’s stewardship team, among the largest on Wall Street, still claims a lot of power in the proxy voting universe.

Last year, BlackRock’s investment management team, led by Boss, a former longtime partner at advisory firm McKinsey, interacted with thousands of public companies it invests in on behalf of investors. .

BlackRock voted on some 164,000 proposals at about 13,600 companies in 2021, voting on issues including executive pay, climate-related disclosures and who sits on boards. BlackRock noted in a stewardship report that it is broadly supportive of management teams. He voted for the election of 90% of board directors globally last year.

Other companies have taken steps to expand investor voting power as growing numbers of retail investors have flocked to the market during the pandemic. Last year, popular brokerage app Robinhood acquired Say Technologies, a startup that aimed to connect investors to the companies they invest in to vote their stocks and have their say about their investments.

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