BlackRock Inc. is set to expand its Voting Choice program to shareholders of its largest exchange-traded fund – the iShares Core S&P 500 ETF, which has $305 billion in assets – bringing its pioneering proxy voting capabilities to retail investors for the first time.
The expansion of the Voting Choice program is subject to approval by BlackRock's iShares board, according to a Monday news release. Once approved, it's expected to go into effect ahead of the 2024 proxy voting season.
BlackRock, the world's largest asset manager with $9.43 trillion in AUM as of June 30, rolled out Voting Choice last year after announcing it in 2021. Through the program, eligible investors – which are currently limited to institutional investors in certain BlackRock products – have the ability to decide how to vote their shares.
"BlackRock is committed to a future where every investor can have the choice to participate in the shareholder voting process. While many asset owners choose to rely on BlackRock's Investment Stewardship team to engage and execute voting on their behalf, consistent with our fiduciary duty as an investment manager, others want the choice to participate in proxy voting directly," said Joud Abdel Majeid, BlackRock's global head of investment stewardship in a statement.
The proposed expansion of the Voting Choice program to shareholders of BlackRock's iShares Core S&P 500 ETF is a pilot used to evaluate investor interest, test proxy voting infrastructure and user experience before any potential future expansions of the program, according to the statement.
Investors who don't want the responsibility of voting their own shares can delegate the votes default back to BlackRock. That's historically how BlackRock and other asset managers have handled their clients' votes.
Though it was the first, BlackRock is not the only asset manager rolling out programs to allow investors the capability to vote their own shares. Vanguard Group, State Street Global Advisors, and Charles Schwab have similar, limited programs.
But control over voting has landed BlackRock and its peers in hot water with activists and politicians on both sides of the political aisle.
Democrats and left-wing activists have accused BlackRock and its CEO Larry Fink – who, until recently, was the figurehead for ESG investing, an investing strategy that takes environmental, social, and governance factors into account – of not doing enough to address climate change.
Republicans also allege Mr. Fink's pushing a "woke" agenda they say is an overreach of power that unfairly discriminates against the energy industries in red states.
BlackRock's move to allow a growing number of investors the ability to vote their own shares appears to be a response to criticism that the asset manager has too much control over publicly-traded companies, or that it's not using that power in the right way.
Mr. Fink has spoken about the coming "revolution in shareholder democracy" driven by increased investor involvement in corporate governance.
In a letter to investors last year, Mr. Fink wrote: "When mobilized by technology, shareholders can significantly influence a company's future. There is no going back. The next generation of investors will increasingly demand to be heard. Technology has the potential to transform corporate governance in ways that we cannot fully imagine."
