The $9trn fund shop BlackRock announced today a plan to allow retail investors in its largest ETF, the $305 billion iShares Core S&P 500 ETF (IVV), a choice in proxy voting.
The move would include retail investors in BlackRock’s proxy voting choice programme for the first time, a program that was first announced for institutional investors in 2021.
That plan, which went into effect at the start of 2022, allows institutional investors to choose from one of 14 different voting policies from proxy advisors Institutional Shareholder Services (ISS) or Glass Lewis & Co.
The voting policies are guidelines set out by proxy advisory services that determine how ETF shareholders will vote in proxy votes for different companies.
The new program would allow retail investors to choose from seven of the voting policies currently offered to institutional shareholders. BlackRock decided a shorter list was easier to understand for retail investors, according to a person familiar with the program.
BlackRock voting choice
“BlackRock is committed to a future where every investor can have the choice to participate in the shareholder voting process,” said Joud Abdel Majeid, global head of BlackRock Investment Stewardship.
"In support of this, we are pleased to be working towards expanding BlackRock voting choice to our largest ETF, and we look forward to learning from this pilot starting 2024.”
Vanguard Group announced a similar program last year, and State Street Corp. announced one earlier this year.
The expansion would make $2.3trn of BlackRock’s total stock index fund assets under management—more than half of BlackRock’s total stock index fund assets—eligible for the voting choice program.
The proposed policies are, in ascending order of how aligned they are with management in proxy votes, the Glass Lewis Governance Focused Policy, the ISS Board Aligned Policy, the BlackRock Investment Stewardship Policy, the Glass Lewis Benchmark Policy, the Glass Lewis Climate Policy, the ISS Socially Responsible Investing Policy and the ISS Catholic Values Policy.
In 2022, the policies voted against the board of S&P 500 companies in proxy votes anywhere from 1% of votes for the Glass Lewis Governance Focused Policy to 78% of the time for the ISS Catholic Values policy, according to BlackRock data.
For comparison, the standard BlackRock Investment Stewardship policy voted against management 3% of the time.
The source familiar with the program also said board approval would likely happen in September and the company would launch in early 2024, in time for next year’s proxy voting season.
This article was originally published on ETF.com
