“BlackRock has also faced criticism from politicians regarding its influence on voting outcomes given the magnitude of the firm’s proxy voting power. This change is a way for BlackRock to demonstrate that they are not advancing one set of beliefs, but rather are providing their clients with the ability to make their own proxy voting decisions.”


- Brian Valerio, J.D., Senior Vice President in the Advisory Group at Alliance Advisors


Source: BlackRock. Client funds participating in BlackRock Voting Choice are as of December 29, 2023. Assets include index equity assets held in multi-asset fund of funds strategies.


Note: Newly committed Voting Choice AUM includes pooled fund clients that have elected BlackRock Voting Choice options 1 or 3 and separate account clients that have elected BlackRock Voting Choice options 2 or 3. Certain institutional pooled funds that implement Systematic Active Equity (SAE) strategies are also eligible for BlackRock Voting Choice but are not displayed in the chart. Eligible SAE institutional pooled funds and separate accounts amount to $104bn in eligible Voting Choice assets. All currency shown in USD.


Every direct vote they get from retail is twice as likely to be a ‘for’ vote for the company versus institutions, which is all the motiva- tion in the world.” Michael Levin, an independent activist investor and advisor for two decades, believes that one thought regarding proxy voting by retail is, “Of course we should have the right to do this; that is how the U.S. system of capitalism works.” However, given the amount of effort shareholders may need to research individual companies to make informed voting decisions, Levin believes this may prevent these shareholders from exercising this right.


An Initial Response What has been the reaction thus far to the launch of BlackRock’s Voting Choice for retail? In general, the responses have been positive. Levin, who has studied pass-through voting in depth throughout his career, notes that BlackRock is held in very high esteem when it comes to investor stewardship and so upon announcing the Voting Choice pilot, there was “a lot of warm feelings at first.” John Coates, Deputy Dean for Finance and Strategic Initiatives


and the John F. Cogan Professor of Law and Economics at Harvard Law School also likes the program. “I believe cost-effective meth- ods of providing end-investors with some ability to influence how their money is used in voting is a good thing,” Coates says. He is


niri.org/ irupdate


the author of Te Problem of 12: When a Few Financial Institutions Control Everything, which speaks to the growth of index funds and their potential to limit the shareholder’s voice. Coates was quoted in Te New York Times in February 2024


noting that “index funds have too much power. Tey are the biggest shareholders in just about every public company. And the trend of over-concentration of ownership is continuing.” Brian Valerio, J.D., Senior Vice President in the Advisory Group


at Alliance Advisors, agrees in the importance of this pilot in par- ticular and commends BlackRock “for expanding retail investors’ ability to exercise their proxy voting power [as] proxy voting is an important and valuable right that is afforded to investors and can influence issuers’ policies/practices.” Although he favors BlackRock’s efforts, Valerio notes, “BlackRock


has also faced criticism from politicians regarding its influence on voting outcomes given the magnitude of the firm’s proxy voting power. Tis change is a way for BlackRock to demonstrate that they are not advancing one set of beliefs, but rather are providing their clients with the ability to make their own proxy voting decisions.” Lambert also highlights the other viewpoint. While favoring


the pilot, he notes that its launch was a “softer-touch governance move for BlackRock versus the ESG bat that they’ve been swinging around for the past several years.”


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