BlackRock's newly released “Investment Stewardship Annual Report” (summary here), which captures its proxy voting-focused stewardship activities for the 12 months ended December 31, 2023, reveals a plethora of noteworthy statistics, engagement examples, and instructive commentary that should help inform companies' engagement and disclosure going forward.
Key takeaways include:
Globally, BlackRock supported about 9% of 830 shareholder proposals compared to about 14% in 2022. This commentary is noteworthy:
We observed a greater number of overly prescriptive proposals or ones lacking economic merit. Importantly, the majority of these proposals failed to recognize that companies are already meeting their asks. Because so many proposals were overreaching, lacking economic merit, or simply redundant, they were unlikely to help promote long-term shareholder value and received less support from shareholders, including BlackRock, than in years past.
More specifically, BlackRock supported about 12% of governance-related shareholder proposals (54 of 434); ~4% of social (company impacts on people) proposals (nine of 237); and ~6% of environmental (climate and natural capital) proposals (10 of 159). The report notes that it did not support proposals “that were overly prescriptive or unduly constraining on management, that lacked economic merit, or made asks that the company already fulfills.”
Approximately 82% of the environmental and social shareholder proposals voted were in the US. As was the case last year, BlackRock called out the increasing volume and declining quality of and support for shareholder proposals in the US:
Last year’s report (which we reported on here) attributed the sharp decline in overall shareholder support for environmental and social shareholder proposals in the US, coupled with a spike in the number of such proposals, to the SEC’s Staff Legal Bulleting No. 14L, which is also cited in T. Rowe Price’s report discussed above.
BlackRock supported ~89% of director elections globally. The primary reasons BlackRock did not support certain directors in 2023 were concerns regarding director independence, board composition, director overcommitment, and executive compensation. More generally, BlackRock supported 88% of management recommendations on management proposals.
The report’s discussion on board quality and effectiveness specifically (p86) (one of five engagement priorities) encompasses BlackRock’s view and expectations on—among other things—director independence, board diversity (in its broadest sense), board refreshment, director overcommitment, and board oversight of generative AI.
The report also includes numerous engagement and other voting statistics by topic and by region, a list of BlackRock’s vote bulletins issued for 2023 meetings, and more.