BlackRock has handed shareholders the ability to nominate directors to its board, after backing the same rights on investee companies.
The world’s largest asset manager will now allow shareholders, or groups of up to 20 shareholders, that have owned more than 3 per cent of its stock for more than three years the ability to nominate individuals for election to the board, granting so-called ‘proxy access’.
“We continually evaluate our governance policies to ensure they reflect the latest best practices, and we are pleased to propose proxy access for shareholders with true long-term economic ownership,” said Larry Fink, BlackRock’s founder and chief executive.
The asset manager has backed such rights on the companies in which it invests for some time, but has until now not afforded its shareholders the same rights.
BlackRock will only allow shareholders to nominate up to 25 per cent of the board. The asset manager has also placed a “economic ownership” caveat on the proxy access, meaning investors have to have “full economic interest” in the shares, ruling out those shorting the stock.
The practice has been growing in popularity, with data firm ISS predicting that by the next proxy season 6 per cent of S&P 500 firms will have proxy access rules in place.
BlackRock’s proposal requires shareholder approval and will be voted on at the AGM in May next year.