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FINALLY: BlackRock Caves to Investor Pressure on Activism

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After years of using investor money to pursue the “woke” agenda of BlackRock management, the company has endured enough criticism to force it to enable index fund shareholders to vote on their own. BlackRock has responded to a blistering WSJ editorial titled “Calling Out ‘Emperor’ Larry Fink,” with a letter from Sandra Boss, the management firm’s Senior Managing Director, and Global Head of Investment Stewardship. She outlined BlackRock’s new attempts to return power to the real owners of the shares, investors. She wrote:

Our clients save for long-term goals, so we take a long-term perspective. How companies engage with employees and adapt to the energy and technology transitions will affect our clients’ long-term returns, so they factor into our voting decisions.

Most clients don’t simply want to rely on proxy advisers such as ISS and Glass Lewis. They want BlackRock to be voting and engaging with companies on their behalf throughout the year. We know the money we manage is not our own. It belongs to our clients, and for clients who want more direct involvement in proxy voting, BlackRock is using technology and innovation to provide new options.

Today, we offer voting choice to institutional clients, including pension funds that support 60 million people. This option allows clients to decide for themselves proxy questions like ESG disclosure or executive compensation. We’re committed to a future in which every investor has that same option.

While there are regulatory and logistical hurdles to overcome, voting choice can be a powerful tool to enhance shareholder democracy and bring more voices to capitalism.

All Your Survival Guy can say is, it’s about time. BlackRock and other index fund managers have usurped shareholders’ rights to vote their shares for too long. Just look at the damage it has caused:

Not Quite There

BlackRock has already added more control for institutional investors (think pension funds), but hasn’t fine-tuned the program for individuals. BlackRock’s CEO Larry Fink recently wrote:

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We now offer this option to certain institutional clients, including pension funds that support 60 million people. We are working to expand that universe.

We are committed to a future where every investor – even individual investors – can have the option to participate in the proxy voting process if they choose.

This is good news for investors, and hopefully, the measure will be mirrored by the other large asset managers.

Action Line: The best way of all to avoid interference by fund managers is to invest in individual shares. I encourage you to pursue an investment plan that puts you in control of your own shares. If you need help building a portfolio with control in mind, I would love to talk with you. If you would like to get to know me before we talk on the phone, there’s no better way than signing up for my free monthly Survive & Thrive letter. In the letter each month, I encourage and push you to achieve the personal and financial security goals you’ve set for your family. Click here to subscribe. We’ll get to know each other, and get serious about your future success.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.
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