BlackRock Releases Report Downplaying the Role of Institutional Investors in Voting Decisions

On July 24, 2019, BlackRock released a report discussing the impact of institutional investors on director elections, say-on-pay, M&A-related votes and shareholder proposals. Notably, the report states that the view that asset managers are determining the outcome of proxy votes is not supported by the data. According to the report, the vast majority of ballot items are won or lost by margins greater than 30%, meaning that even the three largest asset managers combined could not change the vote outcome. This report comes at a time when investors, regulators and other stakeholders are increasingly pushing for ways to better align institutional investors’ investing and voting behavior with their clients’ interests due to the significant influence the largest asset managers have on proxy voting outcomes. For example, James McRitchie recently submitted an SEC rulemaking petition seeking to amend the SEC’s proxy voting record disclosure requirements to require real-time disclosure of mutual funds’ proxy voting records in a user-friendly format in order to enable investors to easily compare each fund’s voting record and invest in funds that vote in alignment with their values. The full text of BlackRock’s report is available here and the full text of the SEC rulemaking petition is available here.