BlackRock has expanded proxy-voting powers to institutional investors in the UK, Canada and Ireland after a successful roll-out of the program in the US at the beginning of this year.
In a release last week, the US$10 trillion investment powerhouse said the ‘Voting Choice’ option now applies to 95 per cent “of our institutional index equity products under management – that’s about half of our index equity assets and virtually all of our index equity assets outside ETFs and retail mutual funds”.
Under the BlackRock proxy-democracy move institutional investors in the four jurisdictions can now vote on corporate proposals in their own right. Institutional investors in both BlackRock pooled funds and separate mandates have access to the new proxy-voting service.
“BlackRock clients have committed $530 billion – or a quarter of eligible assets – to voting their own preferences through Voting Choice,” the statement says. “In the five months since BlackRock introduced the program, clients representing $120 billion 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 billion) that have always controlled their own voting.”
In a white paper published last week outlining the move, the manager says it plans to enfranchise investors in “all markets and to all fund and account types where it is legally and operationally viable to do so”.
The BlackRock white paper says Europe will be next in line for the institutional proxy service with no mention of whether Australian or NZ investors would have the right to vote soon.
BlackRock holds sway over at least $20 billion of NZ investor money through large mandates with both ASB and AMP KiwiSaver and other funds.
For now the BlackRock proxy freedom is limited to institutional investors but the group its testing a retail version in pilot programs in the US and UK.
Salim Ramji, BlackRock global head of iShares and index investments, said in the release: “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.”
However, the white paper says a full proxy vote system for retail BlackRock investors faces substantial obstacles.
“We recognize that there are still considerable regulatory, legal and operational challenges to rolling out such a program on such a broad scale, but we see this as an important step in the evolution of investing, and we intend to continue to advance this vision toward reality,” the paper says.