BlackRock Expands Voting Choice to Additional Clients
Clients representing nearly half (47%) of index equity assets globally are now eligible for BlackRock Voting Choice
Clients representing 25% ($530 billion) of eligible index equity assets ($2.3 trillion) have elected to participate in BlackRock Voting Choice
Firm extends the range of institutional pooled funds offering BlackRock Voting Choice – now offered to more funds in the U.K., and in Canada and Ireland for the first time
Firm working on ‘proof of concept’ for individual investors in U.K. to participate in BlackRock Voting Choice
In response to growing client interest, BlackRock today announces that it is further expanding the opportunity for eligible clients – including public and private pension plans, insurance companies, endowments, foundations and sovereign wealth funds – to participate in proxy voting decisions, where legally and operationally viable.
The expansion of the program reflects BlackRock’s commitment to democratize participation in the financial markets by providing clients the industry’s broadest range of choice to help them meet their investment objectives with the freedom to choose how their votes are cast.
BlackRock today also published a white paper, ‘It’s All About Choice’, that outlines the firm’s ambition to expand Voting Choice to all investors, including individual investors in funds.
Salim Ramji, Global Head of iShares and Index Investments, BlackRock commented:
“BlackRock’s ETF and index investments offer clients thousands of low cost, convenient options for how to invest their money – and that freedom to choose is also extending to proxy voting. Following years of work on technology and regulatory barriers, nearly half of our clients’ index equity assets – including pension funds representing more than 60 million people – have easy and efficient options to vote their preferences. While BlackRock’s Voting Choice program is an industry first, we see it as just a beginning. Our ambition is to make voting choice convenient and efficient for all investors, and we are working with policymakers and industry participants around the world to extend voting choice for our clients”.
Sandy Boss, Global Head of BlackRock Investment Stewardship, commented:
“Our clients have a range of investment horizons, risk preferences and financial needs. We understand that some clients are seeking increased customization, including the opportunity to align their voting with their unique investment philosophies or their views. We are therefore pleased to provide our clients with voting choice options that are the broadest available today. For those clients who authorize BlackRock to manage voting decisions on their behalf, BlackRock Investment Stewardship will continue as an important link between our clients and the companies we invest in on their behalf”.
Voting Choice Sees Significant Adoption as Firm Expands Option to Even More Clients
After several years of investment and work to overcome technological and regulatory hurdles, the firm successfully launched the BlackRock Voting Choice initiative in October 2021 and the initial phase of BlackRock Voting Choice went live on January 1, 2022. This phase provided certain institutional clients, including pension funds, insurance companies and corporations invested in many index strategies, more choice in how they participated in voting at shareholder meetings. These institutional clients were invested through separate accounts globally and certain pooled funds managed by BlackRock in the U.S. and U.K.1
The second phase of BlackRock’s Voting Choice program is expanding the institutional pooled fund ranges eligible for Voting Choice in the U.K. and is also expanding Voting Choice to Canadian and Irish institutional pooled funds. As a result, nearly half (47%) of the $4.9 trillion2 index equity assets – including more than 6503 pooled investment funds in the U.S. and the U.K. – are now eligible to participate in BlackRock Voting Choice.
BlackRock clients have committed $530 billion – or a quarter of eligible assets - to voting their own preferences through Voting Choice4. In the five months since BlackRock introduced the program, clients representing $120 billion5 of assets have elected to vote their own preferences, enabled by the ease and efficiency of BlackRock Voting Choice. This builds on the legacy clients (with assets of $410 billion6) that have always controlled their own voting.
BlackRock Voting Choice is available today for 100% of U.S. pension plans. In Europe and the U.K., 80% of BlackRock’s index equity assets (other than ETFs) are eligible for BlackRock Voting Choice.
Our Commitment to Investment Stewardship
While BlackRock is offering clients more choice in how index holdings can be voted, BlackRock Investment Stewardship (BIS) is a critical component of BlackRock’s fiduciary approach.
BlackRock continues to invest in its industry leading investment stewardship team. As part of their voting choice options, clients can continue to elect BIS to vote on their behalf. Regardless of which option they choose, BIS will continue to engage with the companies in clients’ investment portfolios throughout the year on a broad range of issues that the team believes are material to a company’s ability to create long-term economic value for shareholders, including governance and long-term strategic planning. These engagements inform BIS’ voting decisions.
To support informed voting decisions, in the 12 months to December 31, 2021, BIS held more than 3,600 engagements with more than 2,300 unique companies. BIS voted at more than 17,200 shareholder meetings, casting more than 164,000 votes on behalf of clients that have authorized BlackRock to manage voting decisions on their behalf.
More Options for More Investors
In service of BlackRock’s ambition to a future where every investor can have an easy and efficient option to participate in voting decisions if they choose, BlackRock is also working with industry partners on a pilot that aims to enable all investors in a U.K. mutual fund – institutions and individuals – to exercise choice in how their portion of eligible shareholder votes are cast on the companies in this fund.
Beyond this U.K. pilot program, we have already begun to innovate on a small scale by offering additional shareholder voting options in the U.S. to a subset of individual investors, as well as endowments and foundations, through Aperio (a provider of personalized, tax-optimized separately managed accounts within BlackRock).
BlackRock Published Whitepaper to Promote Dialogue around Voting Choice
BlackRock today also published a white paper, ‘It’s All About Choice’, that discusses how to further democratize participation in the proxy voting process and overcome the infrastructure and regulatory hurdles to doing so. In the U.S., BlackRock is eager to work with policymakers to explore what changes in federal and state law would be required to bring more voting choice or input to more people, whether fund boards or individuals, and to analyze the pros and cons of various potential changes.
BlackRock Clients comment on Voting Choice
Romi Savova, CEO, PensionBee, commented:
“We are delighted to partner with BlackRock to allow our customers to have a say in voting decisions at companies in which PensionBee plans are invested. Giving customers the ability to participate in shareholder voting through their pensions is the powerful next step towards our vision to create a future where everyone can have a happy retirement.”
Leola Ross, Ph.D., CFA, Deputy CIO and Head of ESG, Seattle City Employees’ Retirement System, commented:
“Seattle City Employees’ Retirement System (SCERS) is pleased to join other asset owners in using Voting Choice, a groundbreaking proxy-voting implementation for commingled funds. SCERS applauds BlackRock for working through the technological and regulatory challenges that make Voting Choice a reality.”
Arian Borgers, Investment Manager, Stichting Philips Pensioenfonds, commented:
“We continue to authorize BlackRock Investment Stewardship to vote on behalf of the Philips Pension Fund. After close review we have determined that BlackRock Investment Stewardship’s policies are well aligned with our own stewardship policy.”
Notes to Editors:
BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate
BlackRock Voting Choice Options
These remain consistent with the launch of BlackRock Voting Choice in October 2021.
- Clients exercise control over their voting -- Some of BlackRock’s largest institutional clients have the resources and the expertise to create their own voting policies, as well as the infrastructure needed to conduct the voting. This option gives clients in pooled vehicles the ability to apply their stewardship preferences in a consistent way across a broader share of their overall portfolio allocation and to exercise a high degree of control over the decision-making process and the voting implementation7. BlackRock Voting Choice is available to institutional clients of all sizes and resourcing levels.
- Clients take a hybrid approach to voting -- This option gives institutional clients in separately managed accounts (but not pooled vehicles) the ability to exercise their voting decisions on the topics or at the companies that matter most to them. Clients can choose to vote their own preferences on some categories of votes, rather than all; these may be specific proposals (for example on governance), specific sectors (such as energy or finance), or specific markets (often the client’s home market). The client can choose to leave all other voting decisions to the manager’s discretion.
- Clients choose from a slate of third-party policies -- Under this option, institutional clients in both separately managed accounts and certain pooled vehicles can choose to follow an off-the-shelf voting policy from third-party proxy advisers, choosing the policy that best aligns with their views and preferences. Institutional Shareholder Services (ISS), Glass Lewis and others already offer ready-made policies. Clients can currently choose from at least seven different third-party policies8, and we expect and hope that the range of choices will expand over time in line with growing investor demand for a diversity of choices.
- Clients rely on BlackRock’s informed judgment for all voting decisions -- In this option, clients may choose to rely on BlackRock for all of their voting decisions. Continuing to rely on BIS to exercise voting authority is itself a choice and a deliberate decision by the client to trust BlackRock as a fiduciary to look after its long-term economic interests.
1 Institutional 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 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.
2 BlackRock as of March 31, 2022.
3 As of May 4, 2022.
4 Client funds participating in BlackRock Voting Choice are as of May 15, 2022; assets under management are as of March 31, 2022.
5 BlackRock as of May 15, 2022.
6 BlackRock as of May 15, 2022.
7 Because 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.
8 Of the seven policies, all are available in the US and six are available in EMEA.