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BlackRock Investment Stewardship has unveiled its Global Principles and U.S. Proxy Voting Guidelines for 2024 annual meetings. The 21-page Principles give a comprehensive view of BIS’s stance on 7 key themes that impact companies worldwide – ranging from board responsibilities, to shareholder protections, to sustainability.

The Voting Guidelines get more specific on how BlackRock’s perspectives on these themes apply to specific ballot items & topics in different markets. Overall, the U.S. Voting Guidelines didn’t change too much. While BlackRock seems to have backed off some of its more controversial positions, it still encourages disclosure and strong governance practices. Here are a few updates worth noting:

● CEO & Management Succession Planning – The guidelines now say that where there is significant concern regarding the board’s succession planning efforts, BlackRock may vote against members of the responsible committee, or the most relevant director. (See Meredith’s blog from earlier this month about trends in “succession planning” disclosure…)

● Committee Leadership – Where boards have adopted corporate governance guidelines about committee leadership and/or membership rotation, BIS appreciates clear disclosure of those policies.

● ISSB Standards – Recognizing that the TCFD framework has been absorbed by the International Sustainability Standards Board (ISSB) standards, BIS encourages disclosures on governance, strategy, risk management, and metrics & targets that are aligned with IFRS S1 and S2. BIS understands that companies may phase in ISSB reporting over several years and that some companies use different reporting standards.

● Climate Disclosures – BlackRock continues to seek to understand companies’ strategies for managing material climate risks & opportunities under various scenarios. BIS emphasizes that it is not dictating strategy, which is the role of the board & management, and that it can be challenging for companies to predict the impact of climate issues on their business. But it notes that this is a structural shift in the global economy that may affect regulations, technology & consumer preferences, which be material for many companies.

● Key Stakeholders and HCM – While BlackRock continues to encourage disclosure on DEI approaches, workforce demographics, and natural capital issues, it no longer indicates that it will vote against directors if it determines that a company is not appropriately considering their key stakeholders or if a company’s disclosures or practices fall short relative to market peers on human capital management.

● Shareholder Proposals – A new section says that when assessing shareholder proposals, BIS evaluates each proposal based on merit and long-term financial value creation. BIS does not support proposals that it believes would result in over-reaching into the basic business decisions of the company. In addition, BIS believes it’s helpful for companies to disclose the names of the proponent or organization that has submitted or advised on the proposal. BIS may support shareholder proposals when they are focused on a material business risk that the company has not adequately addressed, if the proposal is reasonable and not unduly prescriptive.

● Responsiveness – Alternatively, or in addition, BIS may vote against the election of one or more directors if, in its assessment, the board has not responded sufficiently or with an appropriate sense of urgency to a shareholder proposal. BIS may also support a proposal if management is on track, but it believes that voting in favor might accelerate efforts to address a material risk.

Most of the other changes are clarifications & what the more cynical among us would call “refined corporate-speak” around ESG/sustainability, BIS’s focus on long-term financial value, and its voting authority. A new 15-page spotlight from BIS – with input from the BlackRock Investment Institute – underscores the asset manager’s focus on “financial resilience” in the face of big geopolitical & economic changes, AI disruption, demographic changes, and the worldwide transition to a low-carbon economy. If you’re engaging with BlackRock this year, expect questions on these topics.

– Liz Dunshee