On October 7, 2021, BlackRock, the world’s largest asset management firm, announced that it has launched an initiative to provide its institutional clients, such as pensions and endowments, the opportunity to make their own voting decisions on proxy matters tied to their investments. Beginning in 2022, these voting options will first be made available to institutional clients invested in its index strategies holdings within institutional separate accounts globally and certain pooled funds in the U.S. and UK that are managed by BlackRock. According to BlackRock, approximately 40% of the $4.8 trillion in index equities it manages will be eligible for these new voting options, including the ability to vote directly on proposals at annual meetings of portfolio companies. Given BlackRock’s penchant for supporting management in election contests, this transfer of voting power could lessen BlackRock’s vast influence in proxy contests by opening up opportunities for shareholder activists to solicit such votes from the ultimate investor.

Eligible BlackRock investors will have the following voting options:

• Voting proxies according to their own internal policies using their own voting infrastructure;
• Choosing from a menu of third-party proxy voting policies and votes will be cast according to the selected policy using BlackRock’s voting infrastructure;
• Voting directly on selected resolutions or companies of their choice using BlackRock’s voting infrastructure (only available to institutional separate accounts); or
• Continuing to allow BlackRock’s independent investment stewardship group, BlackRock Investment Stewardship (BIS), to vote on their behalf using BlackRock’s voting infrastructure.

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