BlackRock is looking to leverage its $3.3 trillion of client assets by embarking on an unprecedented campaign to urge corporations to adopt shareholder-friendly practices.
Laurence D. Fink, BlackRock’s CEO, said in a letter Wednesday to 600 of its biggest holdings, including Apple, Coca-Cola, BNP Paribas and Deutsche Telekom, that his firm “seeks to engage in dialogue” with management to address issues that will be raised this year at shareholder meetings.
“We think it is particularly important to have such discussions — with us and other investors — well in advance of the voting deadlines for your shareholder meeting and prior to any engagement you may undertake with proxy-advisory firms,” Mr. Fink wrote in the letter, referring to companies that help institutional investors decide how to vote.
BlackRock holds at least 5% of the shares of 2,400 companies worldwide. The firm’s public stance under Mr. Fink is unusual in the U.S., where traditional asset managers haven’t typically been vocal about corporate practices at companies whose shares they hold. Mr. Fink said last year he believes money managers will play a larger role in financial markets as Wall Street’s influence declines.
While some pension funds, union plans and activist investors such as Carl Icahn and Nelson Peltz have a reputation for expressing their views on governance-related topics ranging from climate change to company strategy, managers of mutual funds typically avoid such strategies.
A May 2011 study by the American Federation of State, County and Municipal Employees and Fund Votes, an independent research website, showed that mutual funds supported 80% of management proposals in 2010, compared with 84% during the prior year. In a presentation on its website, BlackRock said it has voted in favor of 91% of proposals recommended by management.
In Wednesday’s letter, Mr. Fink wrote that BlackRock reaches its voting decisions independently of proxy-advisory firms and that they are designed to “protect the economic interests” of its investors.