Victoria Gaytan and Hilary Novik-Sandberg are Vice Presidents at BlackRock Investment Stewardship. This post is based on their BlackRock memorandum.
Our Engagement Priorities
BlackRock Investment Stewardship’s (BIS) Engagement Priorities [1] reflect the five themes on which we most frequently engage [2] companies, where they are relevant, as these can be a source of material business risk or opportunity. As such, they may impact companies’ ability to deliver the long-term financial returns on which our clients depend to meet their investing goals. The vast majority of BIS’ work is focused on corporate governance. In our experience, sound governance is critical to the success of a company, the protection of investors’ interests, and long-term financial value creation.
BIS’ work aligns with BlackRock’s fiduciary responsibilities as an asset manager to always act in our clients’ best financial interests. BIS takes a constructive, long-term approach to our engagement with companies and focuses on the drivers of risk and financial value creation in their business models. Engagement is core to our stewardship efforts as it provides us with the opportunity to improve our understanding of a company’s business model and the risks and opportunities that are material to how they create financial value, including business relevant sustainability-related risks and opportunities. [3] Engagement may also inform our voting decisions for those clients who have given us authority to vote on their behalf.
As one of many, and typically a minority shareholder, BIS does not tell companies what to do. Our role, on behalf of our clients as long term shareholders, is to better understand how company leadership is managing risks and capitalizing on opportunities to help protect and enhance the financial interests of their investors.