BlackRock's newly-released 2019 Investment Stewardship Annual Report - which captures its investment stewardship activities for the 12 months ended June 30th - reveals a plethora of noteworthy statistics, engagement examples, and instructive commentary that should help inform companies' engagement and disclosure going forward.
Key takeaways include:
- Management support: Of 31,570 proposals voted at 3,896 meetings in the US, BlackRock voted against management's recommendations on 7% of proposals.
- Board diversity: Consistent with its Proxy Voting Guidelines and public pronouncements, BlackRock voted against directors (typically the Nom/Gov chair or members) at 52 Russell 1000 boards with fewer than two women.
- Overboarding: BlackRock has significantly stepped up its votes against overboarded CEOs, having reduced the threshold for outside directorships to no more than one public company board outside the CEO's own company, as shown here:
- Compensation: BlackRock voted against nearly a quarter of US small cap equity plans (compared to 7% of Russell 3000 plans), indicating that their governance and compensation practices are still evolving to meet "market best practices."
- Climate risk: Climate risk engagements - 207 globally this year - were increasingly in-person rather than by letter as was more commonly the case last year due to the deeper dive, company-specific nature of the engagements following last year's "introductory" engagement phase on this topic.
- HCM: BlackRock engaged 237 companies on human capital management globally this year. This table identifies board and management engagement topics:
- Activism: BlackRock supported 16% of dissident candidates - or 8 of 49 total seats - based on 13 proxy contests reported for the year ended June 30, 2019.
The report includes a list of companies BlackRock substantively (more than just a letter) engaged.
See also this Intelligize post; these articles from Reuters and CFO.com; this prior report: "Director Overboarding Trends"; and additional information & resources on our Institutional Investors page. This post first appeared in the weekly Society Alert!