BlackRock is opening up its Voting Choice platform to retail inventors, a dramatic expansion of the service that its institutional clients use to instruct the asset manager on how to cast proxy votes. Many corporate matters voted on by shareholders can have a major impact on everything from company policies and new board members to compensation.
Investors in commingled stock funds rely almost entirely on fund managers to vote on the corporate matters of companies. Some managers — especially the larger ones — invest a lot of time and effort on how shareholders vote. But the majority of asset managers rely on proxy advisor services, such as Glass Lewis or Institutional Shareholder Services, for guidance on casting votes. Now, BlackRock is giving retail investors the option to direct their proxy votes.
More than three million U.S. retail shareholder accounts invested in the iShares Core S&P 500 ETF (IVV) will get access to Voter Choice. Retail investors represent about $200 billion of the fund’s $399 billion in assets. Those clients will begin receiving communications about the platform Feb. 14.
Opening up the platform to retail clients increases assets eligible for Voting Choice to $2.6 trillion, half of BlackRock’s index equity assets under management. BlackRock is using the ETF to gauge retail investors’ interest in the platform, the proxy voting infrastructure, and the user experience. The company did not share when it might expand the platform to other funds. The expansion of voting choice is unrelated to a partnership that BlackRock has with Proxymity, a digital proxy voting startup.
Institutional investors have had access to Voting Choice for two years, the first time in the industry a service like it was available. As of December 29, clients representing $598 billion in assets were using it to some degree. If they want, investors can create their own bespoke voting policies and tell BlackRock how to vote each individual ballot using a third-party service they choose. They can also choose to rely on BlackRock’s investor stewardship team or other proxy advisor service.
Clients with separately managed accounts at BlackRock already have access to Voter Choice to give proxy instructions.
The majority of currently eligible clients continue to use BlackRock’s investment stewardship team to make proxy voting decisions, the company said.
BlackRock continues to face backlash and even lawsuits related to environmental, social, and governance investing, even though many other asset managers have similar approaches to sustainable strategies. BlackRock Chairman and CEO Larry Fink expressed regret last summer for using the term “ESG” because of how politicized it has become, but the firm continues to publicly defend the use of sustainability and other practices when evaluating businesses, and more aggressively combated misinformation about the firm. (Fink addressed what he said were lies told about BlackRock during a Republican presidential debate.)
At least in terms of proxy voting, the anti-woke campaigns failed last year and it will be more difficult to criticize BlackRock for prioritizing anything other than investor returns if clients can use Voter Choice — a rare client service in the industry. “Broadening access to Voting Choice is one way we empower investors by making proxy voting easier and more accessible. I’m thrilled that today more than three million additional shareholder accounts have an efficient solution for participating in proxy voting if they choose,” Joud Abdel Majeid, global head of BlackRock investment stewardship, said in a statement. “For clients and shareholders who entrust BlackRock with voting on their behalf, we remain steadfast in our focus on their long-term financial interests.”
