BlackRock’s Proxy Votes on Gays Called at Odds With Its Policiesby
Activist Trillium says manager opposes shareholder proposals
Direct engagement with companies works best, BlackRock says
Trillium Asset Management, a $2 billion firm focusing on socially responsible investing, is asking BlackRock Inc. to explain why it doesn’t support corporate shareholder resolutions to protect gay employees when it takes pride in its own policies promoting a diverse workforce.
The world’s largest money manager should report on the “inconsistency” and outline ways to improve its approach, according to an Oct. 14 shareholder resolution sent to the company by Trillium on behalf of the Astraea Foundation, a group dedicated to advancing lesbian, gay, bisexual and transgender rights.
Since 2013, BlackRock has voted against eight shareholder proposals asking major U.S. public companies to include language explicitly protecting their LGBT employees from discrimination, according to mutual fund filings data compiled for Trillium by proxy tracker Fund Votes. BlackRock, which oversees $5.1 trillion, says on its website that “inclusion and diversity are key to our success.”
“There’s a real inconsistency between their internal policies and how they’re voting,” said Brianna Murphy, vice president for shareholder advocacy at Boston-based Trillium. The contrast between the company’s internal and external policies “creates a reputational risk,” Murphy said.
Ed Sweeney, a BlackRock spokesman, said the firm prefers to communicate with companies directly on such issues and will advocate for change regardless of the presence of a shareholder proposal.
“We have found that engagement is the best way to drive change,” Sweeney said in an e-mail. “Through dialogue, we can explain why we believe environmental, social and governance issues drive long-term value for our clients. When our engagement affirms companies are working to enhance their policies, we will support them.”
BlackRock “values diversity and has a history of supporting the LGBT community,” according to Sweeney. The company was recognized by the Human Rights Campaign as a best place to work for LGBT equality and has scored 100 percent on the HRC’s Corporate Equality Index since 2013.
The resolutions BlackRock voted against were made at AGL Resources in 2013; Alpha Natural Resources Inc., American Financial Group Inc., Exxon Mobil Corp., Leggett & Platt Inc. and National Fuel Gas Co. in 2014; Natural Fuel Gas again in 2015; and J.B. Hunt in 2016.
Only the J.B. Hunt proposal received a majority of votes. BlackRock’s stakes in Alpha Natural Resources and Leggett & Platt were significant enough that they might have tipped the outcome into a majority for adding the pro-LGBT language had the firm voted in favor, Murphy said.
Research has shown that companies that embrace diversity outperform others. Credit Suisse published a study in April showing that a basket of 270 companies that had policies supporting LGBT employees beat a broader index of stocks in North America, Europe and Australia by an average of 1.4 percentage points a year.