BlackRock has released its Investment Stewardship Report for the Americas region (United States, Canada and Latin America) for the second quarter of 2019.  The majority of the investor’s stewardship activities during this quarter entail voting and direct engagements to inform its voting decisions given that a majority of its portfolio companies’ shareholder meetings are scheduled in this time period. In sum, in comparison to the second quarter of 2018, BlackRock has engaged with approximately 9% fewer companies in the Americas, and for North America (United States and Canada) the percentage of proposals BlackRock has voted against managements’ recommendations, while still low, has increased from 4% to 7%.

Direct Engagements

The report states that the institutional investor engaged with 319 companies in the Americas in the second quarter of 2019 (9% required meeting more than once), down from 352 companies in the second quarter of 2018.  Governance-related topics were the most frequently addressed (298 topics), followed by environmental (34 topics), then social (24 topics).  The engagements covered multiple themes with the top ones being (1) board composition and effectiveness (56%), (2) compensation (40%), (3) corporate strategy (17%), (4) governance structure (13%) and (5) climate risk and management (8%).

BlackRock notes that voting is only one of its stewardship responsibilities and remarks that shareholder-sponsored proposals actually constitute less than 2% of ballot items in the U.S. markets. BlackRock emphasizes that it assesses each management and shareholder proposal on the ballot and votes in a manner that it believes is most aligned with its clients’ long-term interests.

BlackRock also remarks that, “not all shareholder proposals merit an automatic vote in support.” The investor states that it has “supported an average of approximately 18% of the shareholder resolutions that went to a vote in the US over the past three years.” With regard to shareholder-sponsored proposals, the report briefly summarizes the firm’s approach stating that BlackRock:

  1. Reviews and assesses the company’s disclosures and management of the issues raised;
  2. Evaluates its own understanding of how the issues may potentially “impact the company’s long-term business operations and potential to deliver sustainable financial returns.” BlackRock says it uses this approach particularly with regard to environmental and social issues; and
  3. Engages the portfolio company when the issue is material and BlackRock is unclear how the portfolio company’s leadership is approaching and managing the issue.

The report provides examples of shareholder-sponsored proposals that relate to several issues such as climate change, political spending, the human right to clean water and public health risks. Some examples illustrate where BlackRock has voted against shareholder proposals. In one example, BlackRock reasoned that it had determined that the company provided adequate disclosure, the board exhibited appropriate oversight and the company had established definitive goals to be achieved by a specific deadline.

BlackRock states that it is unlikely to support poorly structured shareholder proposals.  For example, BlackRock criticizes proposals that conflate two or more objectives and at least one of the objectives is not worthy of support. By way of example, BlackRock notes that a multinational oil and gas company that BlackRock had regularly  engaged with received a proposal asking the board to “‘report on the company’s due diligence process to identify and address risks related to the Human Right to Water throughout its operations.’”  BlackRock mentions that at first glance the proposal seemed worthy of support because the proposal had two objectives: (1) a reasonable informational request about water given that the company was in the extractive industry and (2) a human rights concern given the company’s potential impact on local communities.  BlackRock nonetheless declined to support the proposal and explained that “the resolution conflate[d] the issue of the establishment of a human rights policy with that of meaningful water management policies and practices.”  BlackRock found that implementing the action called for by the proposal would unreasonably subject the company to developing a new reporting framework which could be expensive and become obsolete over time.  The investor added that the company’s work demonstrated “steady progress” in addressing its water management practices.

The report provides examples of how BlackRock has used engagement and voting to encourage issuers to enhance their respective sustainability practices.  For example, BlackRock voted against management when the investor found that the company’s “urgency and scale of its practices seem[ed] inadequate to maintain a competitive advantage as a sustainable company.”

Lastly, the report notes that from July 1, 2018 to June 30, 2019, the investor engaged on a broad range of environmental, social and governance topics with over 1,400 individual companies and observed that many of these companies’ practices improved.


For the second quarter in 2019, BlackRock’s portfolio companies in North America collectively held 3,193 shareholder meetings involving 28,004 proposals.  BlackRock voted against management recommendations for 7% of these proposals and with respect to 37% of the meetings.

In North America, BlackRock voted on 230 shareholder proposals relating to the election of directors. The investor voted against management’s recommendations for 12% of these proposals.   For management proposals in the same category (election of directors), out of 20,106 proposals voted, BlackRock voted against management 9% of the time.  Lastly, the firm voted against management for 7% of the 218 management proposals relating to anti-takeover and related topics.