Fink calls for regulatory change to facilitate proxy voting
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The chair and chief executive of BlackRock, Larry Fink, has said joint efforts should be made to see “what changes in law and regulations are required” to bring proxy voting to more retail investors.
The world’s largest asset manager is expanding its voting programme for clients, one year after first launching it, and plans to introduce a voting option for retail investors in some mutual funds in the UK.
Fink wrote in his annual letter to clients and CEOs he hopes “that in the future, every investor – ultimately including individual investors – has access to voting choice, if they want it”. He added: “This revolution in shareholder democracy will take years to be fully realized, but it is one that, if executed correctly, can strengthen the very foundations of capitalism.”
However, Fink added that offering voting choice more widely to retail investors would require the joint efforts of policymakers, regulators, fund boards, asset managers and others, suggesting changes in the law would be necessary.
“As we work to further democratize voting, we are eager to work with policymakers and regulators to explore what changes in law and regulations are required and examine how operational infrastructure may need to be adapted to support those changes,” he wrote.
The US firm is expanding its proxy voting programme Voting Choice by extending the pool of eligible client assets that can participate, offering a wider range of voting guidelines from which clients can choose, and working towards bringing this capability to individual investors in “select mutual funds” in the UK.
Nearly half of BlackRock’s index equity assets under management are now eligible for Voting Choice, including all US public and private pension scheme assets, as well as pension funds serving more than 60m people globally. Fink said clients representing 25% of the $1.8tn in eligible assets have signed up to the programme.
BlackRock launched its tool Voting Choice in October 2021, going live in January 2022 for institutional clients using segregated accounts globally and within some pooled funds in the US and UK. In June, the manager expanded the institutional pooled fund ranges eligible for the tool in the UK, while also starting to offer it within Canadian and Irish institutional pooled funds.
There have been ongoing campaigns for greater stewardship capabilities in pension assets in the UK, including the Association of Member Nominated Trustees’ Red Line Voting guide.
The Department for Work and Pensions set up an industry taskforce in 2020, which last year recommended all asset managers should offer asset owners the opportunity to set an ‘expression of wish’ as to how votes are exercised on their behalf, regardless of how they invest.
Institutional platform the Asset Management Exchange – a Willis Towers Watson service – and asset manager DWS, working with Northern Trust and Minerva Analytics, whose chief executive Sarah Wilson was also vice-chair of the taskforce, created a proxy voting solution early last year.
What do you think about BlackRock’s call for change in laws and regulations?
