Financial Times, November 22, 2022, article: "BlackRock opens door for retail investors to vote in proxy battles" [Expanded marketing of shareholder voting rights]

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Expanded marketing of shareholder voting rights

The following CNBC video addresses broader audience interests in the developments reported in the article below.

SQUAWK BOX

BlackRock touts firm's voting choice program in response to ESG critics

BlackRock is responding to partisan critics in the investment community pushing back on the firm's ESG initiatives. CNBC's Leslie Picker joins 'Squawk Box' with the details.

THU, NOV 3 20226:40 AM EDT

Leslie Picker

For the BlackRock presentation of the reported new phase of its marketing program, see

November 2022, BlackRock, Inc.: "Empowering investors through Voting Choice" (5 pages, 145 KB, in PDF format)

For other recent Forum attention to the development of processes supporting broader engagement of ultimate owners of capital in shareholder voting, see:

October 13, 2022, ALM | Think Advisor: "Schwab Pilots New Broadridge Proxy Polling Solution: Tech Roundup" [Leading shareholder communication service provider introduces tools for broker response to evolving retail investor interests]
June 24, 2022, Insightia: Activism & Voting This Week [New activist venture to address the largest shareholder vote of most public companies]
June 18, 2022, The Wall Street Journal: "The 70 BlackRock Analysts Who Speak for Millions of Shareholders" [Increasing marketplace concerns about intermediary concentration of other people's voting power]
May 10, 2022, Sifted/Financial Times: "Meet the three university friends that want to give voting rights to BlackRock shareholders" [Another new fintech venture supporting retail voting engagement]
March 1. 2022, CNBC: "A new BlackRock shareholder power that may tilt proxy battles of the future" [Testing fund manager's offering control of voting rights to owners of managed capital]

Source: Financial Times, November 2, 2022, article

FINANCIAL TIMES

BlackRock Inc

BlackRock opens door for retail investors to vote in proxy battles

UK pilot by $8tn asset manager signals ‘revolution in shareholder democracy’, says chief executive Larry Fink

Larry Fink, BlackRock chief executive, has drawn scrutiny for his views on corporate governance and climate change © Bloomberg

Brooke Masters in New York NOVEMBER 2, 2022

BlackRock will allow retail investors to vote on proxy battles for the first time as it fends off criticism that its stance on environmental, social and governance issues is at odds with some of its shareholders.

The world’s largest asset manager plans a pilot with UK pooled funds to enable their investors to vote on contested proposals in 2023. Larry Fink, BlackRock’s chief executive, said technology was enabling a “revolution in shareholder democracy” that will “transform the relationship between asset owners and companies” as he announced the plans on Wednesday.

BlackRock’s one-year-old Voting Choice programme already allows institutional investors holding $1.8tn in assets to decide how they want their shares to be voted, and the owners of $452bn have done so. The UK pilot marks the first time that BlackRock will offer the same opportunity to smaller investors.

“It’s clear there are investors who don’t want to sit on the sidelines; they have a view on corporate governance, and they want a meaningful way to express those views,” Fink wrote in a letter to clients and company chief executives. “Voting Choice has the power to transform the relationship between asset owners and companies.”

BlackRock’s initiative to empower shareholders comes as the $8tn manager is under attack for its votes on environmental social and governance matters Republican treasurers in conservative US states have pulled more than $1bn from the group, alleging that it is hostile to fossil fuels. Some Democrats complain that the fund manager should be pushing companies harder to reduce carbon emissions.

Index-tracking funds run by BlackRock and competitors State Street and Vanguard control as much as 20 per cent of most large US public companies, so their votes on contested issues are closely watched. But BlackRock has come in for particular scrutiny as Fink has been outspoken about the group’s stewardship efforts to improve corporate governance and address climate change.

BlackRock said that automation and improved online communication were important to its efforts to offer individualised proxy voting options. In the UK, the manager will be working with Proxymity, a digital platform, to extend the Voting Choice programme to retail investors for the 2023 proxy season.

The fund manager already allows institutional investors to choose among voting their shares directly, letting BlackRock vote their shares or following one of 14 different proxy voting recommendations developed by advisers Glass Lewis or Institutional Shareholder Services.

Efforts to offer proxy voting choice to US small investors are complicated by laws that specify that the investment adviser of an American retail mutual or exchange traded fund is the one who votes the shares held by the fund.

But other asset managers are also trying to find ways to let retail investors vote. Charles Schwab’s asset management arm last month announced a pilot project that will poll investors in one mutual fund and two ETFs to gather their general preferences on core issues. Vanguard said on Wednesday that several of its equity index funds plan next year to “pilot a number of proxy voting policy options for individual investors to choose from”.

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