Blackrock votes against over 5,000 directors as investors step up demands
Asset manager Blackrock opposed the re-election of more than 5,000 directors this year as it said investors are starting to expect more on corporate governance.
The Blackrock Investment Stewardship report for the 12 months to June 2020 found it had voted against 5,100 directors compared to nearly 4,800 the prior year.
Over 1,700 of these votes were due to a lack of director independence while 1,500 of the directors were voted down due to a lack of diversity. While there has been some progress on gender diversity, Blackrock said it expects more.
Just 55 of the 5,100 votes were for failing to meet expectations on climate risk disclosure or management. As part of a look into engagement on climate risk, Blackrock “will hold members of the relevant committee… accountable for inadequate disclosures and the business practices underlying them.”
Blackrock said investor expectations have never been higher, with a 48 per cent increase in engagements to more than 3,000 this year.
Board quality, environmental risks and corporate strategy have been central to much of the discussions, Blackrock said.
It anticipates more voting on material issues brought to the fore by the coronavirus pandemic, following the 420 engagements already undertaken this year.
“We take a firm line in holding accountable the management and boards of directors of these businesses when we do not see sufficient progress on the issues that matter in creating sustainable, long-term value for our clients, who are the ultimate owners of these companies”, global head of investment stewardship Sandy Boss said.