INVESTMENT STEWARDSHIP

Working to expand proxy voting choice for clients

Feb 23, 2022
  • BlackRock

BlackRock’s role is to help our clients achieve their long-term financial goals. Core to this is the fact that the money we manage is not our own; it belongs to our clients. We work hard to stay ahead of our clients’ needs by delivering them the widest set of choices across everything we do so they can choose what works best for them.

BlackRock Investment Stewardship (BIS) encourages sound corporate governance and sustainable business models that we believe contribute to durable, long-term value creation by the companies in which our clients’ assets are invested. The Stewardship team does this through engaging with companies, proxy voting in our clients’ long-term economic interests, and encouraging market-wide governance and sustainability norms.

Most of BlackRock’s clients have delegated authority to our Investment Stewardship team to vote at the annual and special shareholder meetings of the public companies in which we invest on their behalf. Voting is a core stewardship responsibility and something we take seriously.

We also see a growing interest among investors – including BlackRock’s clients – in the corporate governance of public companies. We believe clients should, where possible, have more choices as to how they participate in the voting process for their index holdings. To that end, BlackRock has taken the first in a series of steps to expand the opportunity for clients to participate in proxy voting decisions where legally and operationally viable. Through new technology and working with industry partners our goal is to enable a significant expansion in proxy voting choices for more clients. These Voting Choice options are currently available to institutional clients invested in equity index strategies – within institutional separate accounts globally and certain pooled funds managed by BlackRock in the U.S. and the U.K.1 We are working to expand that universe.

 

Eligible institutional clients invested in index strategies now have the choice to:

  1. vote their shares according to their own policies using their own infrastructure;2
  2. leverage third-party proxy-voting polices using BlackRock’s voting infrastructure;
  3. direct votes on individual resolutions or companies of their choice using BlackRock’s voting infrastructure; and
  4. continue to use BIS to vote proxies on behalf of clients, according to BlackRock’s voting policy using BlackRock’s voting infrastructure.

 

1Institutional separate account clients have the opportunity to vote eligible proxies in eligible markets for the companies in which they are invested. Investors in participating pooled funds who meet the eligibility criteria and who elect option 1 or 2 will have the opportunity to direct voting on eligible proxies in eligible markets for companies held by the funds. BlackRock will determine eligibility criteria under this program based upon, among other things, local market regulation and practice, cost considerations, operational risk and/or complexity, and financial considerations, including the decision to lend securities.

2Because BlackRock is a fiduciary with respect to the pooled funds, BlackRock must review any voting policy that will apply to votes in connection with the funds’ holdings to confirm that the policy is consistent with the fiduciary standards that apply to the funds.

As Larry Fink, BlackRock Chairman and CEO, said in his 2022 letter to CEOs, BlackRock is committed to a future where every investor – even individual investors – can have the option to participate in the proxy voting process if they choose.

BlackRock Investment Stewardship remains central to BlackRock’s fiduciary approach. Choice is what makes BlackRock unique. We anticipate many clients will continue to use our Investment Stewardship team to vote on their behalf. Since its inception two decades ago, the Stewardship team has worked to advance our clients’ economic interests as long-term shareholders. The team will continue to engage companies and vote at shareholder meetings for clients, all year round, all over the world, while as an organization we also work to expand choice to clients that wish to participate in voting more directly.

We know there are significant regulatory and logistical hurdles to achieving this today, but we believe this could serve to accelerate the inclusion of more and more voices in capital markets. For this reason, BlackRock will continue to pursue innovative solutions by working with other market participants and regulators to help advance this vision toward reality.

To learn more about our Investment Stewardship team’s proxy voting activities on behalf of clients please visit our latest report, “Pursuing long-term value for our clients.”

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