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BlackRock | working to expand proxy voting choice

 

  • BlackRock has reported that it is announcing the first in a series of steps to expand the opportunity for clients to participate in proxy voting decisions.
  • To do this, BlackRock says it has been developing new technology and working with industry partners over the past several years to enable a significant expansion in proxy voting choices for more clients.
  • Approximately 40% of the $4.8 trillion index equity assets they manage for clients (as of 30 June 2021) will be eligible for expanded voting options.

Beginning in 2022, Blackrock has revealed that institutional clients invested in certain index strategies – within institutional separate accounts globally and certain pooled funds in the U.S. and UK – will be able to choose a proxy voting option that aligns best with their priorities and goals.

BlackRock has stressed its commitment to exploring all options to expand these capabilities to even more investors, including those invested in ETFs, index mutual funds and other products.

While offering clients more choice in how proxies are voted, BlackRock Investment Stewardship (BIS) remains central to BlackRock’s fiduciary approach. BlackRock continues to invest in its investment stewardship capabilities.

The options will include:

1) Own your proxy voting: Client votes proxies according to their own policy and transmits their votes using their own voting infrastructure.

2) Choose from a menu of third-party proxy voting policies: Client selects from a menu of third-party proxy voting policies, and votes are cast according to the selected policy using BlackRock’s voting infrastructure.

3) Vote directly on select resolutions or companies: Client can direct votes on individual resolutions or companies of their choice using BlackRock’s voting infrastructure. This is an option for clients in institutional separate accounts only.

4) Continue to use BlackRock Investment Stewardship (BIS): BIS votes proxies on behalf of client, according to BlackRock’s voting policy using BlackRock’s voting infrastructure. To support informed vote decisions, in the 12 months to June 30, 2021, BIS held more than 3,600 engagements with more than 2,300 companies. BIS voted at more than 17,000 shareholder meetings, casting more than 165,000 votes on behalf of our clients in 71 voting markets.

Blackrock says that this initiative is consistent with wanting to offer clients choice across the range. “The money we manage is not our own, it belongs to our clients. In seeking client feedback to develop this capability, we heard that many clients want BIS to continue voting on their behalf, while we also heard from clients interested in greater participation in proxy voting.”

Supporting numbers

  • Approximately 40% of the $4.8 trillion in index equity assets we manage are eligible for expanded voting options
  • Over 60 million people globally invest in retirement assets eligible for voting choice
  • $750 billion of pooled fund assets are eligible for these expanded voting options
  • 7 million UK pension savers are invested in our pooled funds, which are now eligible for voting choice

Maria Nazarova-Doyle, CFA, Head of Pension Investments and Responsible Investing at Scottish Widows:

“We have long been calling for asset owners to be able to have a say in the voting of their shares, so today’s announcement from BlackRock signals a welcome step change for the industry. We are looking forward to exploring this innovative proposition with BlackRock ahead of next proxy season. They have developed an exciting capability, and our hope is that today’s news will act as a catalyst for others in our industry to consider how they can more directly facilitate participation in proxy voting.”

Chris Phillips, Director, Institutional Relations and Public Affairs at Washington State Investment Board (WSIB):

“The Washington State Investment Board’s (WSIB) overriding fiduciary responsibility is grounded by a mission of maximizing investment return at a prudent level of risk for the exclusive benefit of fund participants and beneficiaries. A vital part of that fiduciary responsibility is asset stewardship and our ability to ensure responsible alignment between the proxy voting practices of asset owner and asset manager. The WSIB is working as part of BlackRock’s voting choice initiative so that we have the choice to seek the corporate governance outcomes that fit with our Board’s priorities. This sort of technological and operational advancement is helping us implement responsible voting practices and fits with the industry trend toward essential customization of investors’ assets stewardship needs. All of this will help to create alignment with our corporate governance priorities and outcomes.”

 

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