BlackRock Inc. is experimenting with a program that would give a larger number of end investors voting power at shareholder meetings.
(Bloomberg) — BlackRock Inc. is experimenting with a program that would give a larger number of end investors voting power at shareholder meetings.
To gauge interest and see how the new approach would work in practice, the world’s biggest asset manager has reached out to wealth firms in the UK in recent weeks about piloting the program, according to two people familiar with the matter.
The trial will give retail investors at a small number of participating funds a way to choose how shares held by those funds will broadly be voted on. This will happen by allowing them to select from a variety of voting policies, said one of the people, who asked not to be named because the plans are private. Currently, proxy voting is largely done by asset managers, not end investors.
A BlackRock spokesperson declined to comment. The details of this program — and BlackRock’s plans to roll it out — have not been previously reported on.
The move comes nearly three months after chief executive Larry Fink predicted the dawn of a new era of “shareholder democracy,” in which small and large investors would make greater use of their voting power to play a larger role in companies’ governance and social stances. At the time, Fink described it as a “revolution” that could take years to come to fruition and which would strengthen the foundations of capitalism.
Read more: BlackRock’s Fink Foresees New Era of ‘Shareholder Democracy’
BlackRock and large asset managers such as Vanguard Group and State Street Corp. have faced increased scrutiny from investors and politicians in recent years over the outsized influence they hold over companies, and for backing investment motivated by environmental, social and governance — or ESG — goals.
Fink’s outspoken support for ESG has turned BlackRock into a something of a punching bag for forces from all sides of the political spectrum. In an interview with Bloomberg Television in January, the 70-year-old CEO said the narrative around ESG investing had become ugly, polarizing and personal.
Read more: Larry Fink Says ESG Narrative Has Become Ugly, Personal
Via BlackRock funds, the asset manager has already given its biggest clients more power to vote directly at the shareholder meetings of companies in which they are invested.
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