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BlackRock: Investor Vote Is Not A Revolution For Shareholder Democracy

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Mutual funds allow customers to bundle stocks, thus avoiding time-consuming investment decisions. Bundling also means that investors can avoid spending time on corporate governance decisions.

Buyers of passive index funds like BlackRock, Vanguard and State Street want them to: reconsider that preference.

on monday, black rock Three million holders of the company’s $305 billion S&P 500 exchange-traded fund said they could choose not to follow the company’s policy on corporate voting. Holders can choose from a menu of seven other voting strategies for her. These include alignment with organized workers, the Catholic Church and the principles of the United Nations.

Trillions of dollars have flowed into passive strategies that seek to replicate broad market gains. This means that the Big 3 fund manager in the US typically owns 10-20 percent of his large public companies.

BlackRock, Vanguard and State Street maintain a “stewardship” team that determines how votes are voted in line with the House’s corporate governance values. However, this is proving to be cumbersome. The size of the sheet prompts an inexplicable charge of power. Political polarization around topics such as climate change means that voting decisions themselves come under attack.

Investors based in Republican states have withdrawn large sums of money from BlackRock in recent years, citing profits. ESG-related activities topic.

BlackRock said it supported shareholder proposals on climate change risk disclosure in hopes of understanding the impact on shareholder value.

Environmental and social proposals surged 133% during peak proxy season in 2022. BlackRock said only a quarter of those were supported, down from 43% a year earlier. The group says many of its ideas have proven too “prescriptive,” such as asking companies to stop producing or using oil and gas.

The quasi-entitlement of fund investors will not divert as much attention from BlackRock’s vote as BlackRock hopes. Most investors will continue to call investment giants. Depending on the package, it’s best to leave it alone.

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https://www.ft.com/content/213d7d11-90f7-4585-a09c-b08b0675fcb9 BlackRock: Investor Vote Is Not A Revolution For Shareholder Democracy

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