BlackRock to Test Shareholder Democracy in the UK

Gavin Hinks of Board Agenda writes about BlackRock’s “Voting Choice”. The UK sets to become the “test bed” for an experiment in allowing individual shareholders with money in BlackRock to vote their preferences during the general meeting season.

The news comes in a letter from Larry Fink, BlackRock’s chief executive, where Fink says BlackRock is working with a digital investor communications platform to enable investors in some mutual funds to “exercise choice in how their portion of eligible shareholder votes are cast”.

The move comes at a time when BlackRock has faced intense criticism from some quarters for its voting policies on behalf of investors. In October, treasurers in charge of investments funds at a number of Republican-run US states pulled their funds from BlackRock because they claim the fund manager’s ESG voting approach is biased against big energy companies.

Anaïs Sachiko Gaiffe, an analyst at SquareWell Partners, worries about the implications for transparency and accountability. “We fear that BlackRock’s initiative may potentially risk these two key pillars of effective stewardship if BlackRock does not provide adequate training to educate underlying clients, as well as informing on how the underlying clients vote,” she says.

On this last point, she adds, boards will need to know “which shareholder sends what message to the board of directors for them to act and engage.”

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