Investment Stewardship

We believe that companies with sound corporate governance practices, including how they manage the environmental and social aspects of their operations, may better mitigate risk over the long term, and may offer better risk-adjusted return potential. We engage with companies held in index and active portfolios alike to encourage them to adopt the robust business practices we believe are consistent with sustainable long-term performance.

The BlackRock Investment Stewardship team is a centralized resource for portfolio managers. In our stewardship work we aim to:

  • Preserve and enhance the value of clients' assets through engagement with companies
  • Encourage business and management practices that support sustainable financial performance over the long-term
  • Provide specialist insight on environmental, social and governance (ESG) considerations to all investment strategies, whether indexed or actively managed.

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Engagement

Engagement helps build mutual understanding on any issues where we are concerned that a company’s practices fall short of operational excellence. It also helps us assess a company’s approach to governance in the context of its specific circumstances. We engage in a constructive manner. Our aim is to build mutual understanding and ask questions, not to tell companies what to do. Engagement is core to our stewardship program as it helps us assess a company’s approach to governance in the context of its specific circumstances. To that end, we engage with about 1,500 companies a year on a range of ESG issues. We meet with executives and board directors, communicate with the company’s advisors, and engage with other shareholders where appropriate. Engagement helps better inform our voting and investment decisions.

Proxy voting

We undertake proxy voting as our broadest form of engagement. Every year, we vote globally at more than 15,000 shareholder meetings, on over 130,000 proposals. Our starting position is to support management. We generally prefer to engage in the first instance where we have concerns, and give management time to address or resolve the issue. We vote against management proposals if the company is unresponsive or seems not to be acting in the long-term interests of shareholders.

ESG integration

We believe that the best companies strategically manage all aspects of the business — it’s a matter of operational excellence. ESG considerations are integral to our investment stewardship activities. Our clients are long-term investors and it is over the longer term that ESG risks and opportunities tend to be material and have the potential to impact financial returns. We believe the best companies ensure that their investors, as well as other constituents of the company, have enough information to understand the drivers of, and risks to, sustainable financial performance. The BlackRock Investment Stewardship team supports the investment teams to integrate material ESG considerations in their investment analysis.

Leadership
Michelle Edkins
Managing Director, BlackRock Investment Stewardship