BlackRock Inc. released its investment stewardship priorities for the year Wednesday, along with the key performance indicators it will use to track companies' progress on meeting them and for holding corporate directors accountable.
The five core areas where BlackRock Investment Stewardship plans to focus in 2020 are board quality, environmental risks and opportunities, corporate strategy and capital allocation, compensation to promote long-termism and human capital management.
Those priorities were set in 2019 but now have criteria that BlackRock will use to align with its expectations for measurable disclosure and actions taken to create long-term value for shareholders. BlackRock said it will engage even if a company has not received a shareholder proposal.
At companies where progress has not been made on one or more priorities after BlackRock engages, the longest-serving or most relevant director will be held accountable.
"In every market, directors are elected by shareholders to oversee management. As a result, we have found that focusing on holding directors accountable creates a globally consistent approach to stewardship," BlackRock Vice Chairman Barbara Novick said in a company statement.
BlackRock Investment Stewardship also committed to providing more transparency into its engagements and votes, including mapping its engagement priorities to specific United Nations Sustainable Development Goals, and disclosing more about its investment stewardship activities. BlackRock has already shifted to quarterly voting disclosures and issuing vote bulletins on key votes that explain their vote decision.
The firm, with $7.4 trillion under management, said it has the largest and most global investment stewardship team in the industry, and that in 2019 it had more than 2,600 engagements with nearly 1,700 companies.
"BlackRock approaches investment stewardship in a strategic, differentiated way," Ms. Novick said. "We have the capacity to engage companies year-round in meaningful discussions on the specific steps they should be taking to manage long-term risks and opportunities, including increasingly material sustainability issues."