UPDATE 1-BlackRock to give clients more say on holding companies to account

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* Nearly 40% of the $4.8 trillion equity index assets covered

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* Customers can choose to vote directly at the AGM

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*More investors want to take board to account (reevaluations and updates with references, expert comments)

LONDON/BOOSTON, Oct 7 (Businesshala) – BlackRock Inc. plans to give big customers more say on ballots cast at the company’s annual meetings, a move suggested by election experts could result in companies facing more opposition from rebellious shareholders. may have to.

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BlackRock, the world’s largest money manager with assets of $9.5 trillion, typically votes on shares on behalf of investors in its fund, which makes it one of Wall Street’s most influential voices in everything from corporate director elections to climate change. And the workforce diversity builds up in matters of that. .

Beginning next year, however, some institutional account holders will be able to vote for themselves about 40% of the $4.8 trillion in assets held in BlackRock’s equity index strategies, BlackRock said in a letter to clients. Others can choose a third party voting policy and use BlackRock to submit votes.

Matt DiGusepp said the changes could make it difficult for companies to proceed through their choices on shareholder votes because it would give more say to many institutional investors, who often have tougher corporate governance voting policies, such as large pension funds and Endowment. Vice President at corporate governance software firm Diligent.

“I expect this to have a significant negative impact on the level of support that (the company’s) management receives,” DiGuseppe said.

The option to cast a shareholder vote in companies will be offered in some index strategies held within separately managed accounts and certain deposits in the UK and USA.

“These options are designed to enable you to speak as much as possible in proxy voting, if that’s important to you,” BlackRock’s letter said. According to the letter, BlackRock aims to add voting options to more investment products.

The huge boom in low-cost index funds has caused BlackRock to often own 5% or more of top corporations. The firm and its rivals have traditionally touted the recommendations of companies over shareholder votes, although this is beginning to change.

Under a new leadership head this year, BlackRock opposed directors and supported climate proposals more often, though it continued to support management at US companies 95% of the time.

University of Pennsylvania law professor Jill Fish praised BlackRock’s changes for allowing pension funds and other large asset owners to have more say on corporate decisions, and said rival fund managers are at least in a similar direction to US investors. can proceed.

“Big asset managers try to do a good job, but they’re not the people I want to run the country,” Fisch said.

Reporting by Simon Jessop in London and Ross Kerber in Boston; Editing by Greg Rumeliotis and Steve Orlofsky


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