BlackRock Faces Activist Investor Pressure to Split Fink Chair and CEO Role

Bluebell Capital Partners is seeking more transparency in BlackRock’s ESG approach.

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Reviewed by: etf.com Staff
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Edited by: James Rubin

BlackRock’s Larry Fink will face a vote on his dual role as chairman and CEO after a U.K. activist investor called for more oversight over the asset manager’s approach to sustainable investing.

Bluebell Capital Partners put forward a binding resolution on the company’s annual proxy ballot to amend the corporate bylaws to require an independent board chair.

In the submission, Bluebell said there has been “an unequivocal failure of BlackRock’s governance to provide independent oversight on the company’s management”.

The group said: “The CEO of BlackRock is also the chairman. The role of the CEO is to run the company. The role of the board is to provide independent oversight of the CEO. Therefore, in general terms, there is an inherent conflict of interest for a CEO to act as her or his own oversight as chair.”

Bluebell highlighted several instances where BlackRock’s actions contradicted its ESG commitments, with the activist seeing this as evidence of greenwashing and a lack of accountability within BlackRock's board.

Bluebell has previously called on Fink to resign over the “hypocrisy” of his approach to ESG in 2022.

The activist also noted the board was “oversized” with 17 members.

The vote on the resolution will take place at BlackRock's annual general meeting on May 15.

BlackRock's Urges Shareholders to Vote No

In response, BlackRock urged shareholders to vote against the proposal, stating its leadership structure was the “most appropriate” and adding that 54 of the 100 largest U.S. public companies have a combined CEO and chair role.

BlackRock also said that Bluebell’s critique was misguided and rooted in disagreements over proxy voting decisions.

“In this proposal and in other forums, the proponent has made multiple misguided, incorrect and contradictory criticisms of BlackRock that are rooted in its disagreement with proxy voting decisions made by BlackRock’s Investment Stewardship team on behalf of the company’s clients.”

BlackRock said Bluebell has not considered that “a one-size-fits-all approach to board leadership may not suit each company’s circumstances”.

Fink has previously received criticism for ESG concerns.

BlackRock’s former sustainable investment chief Tariq Fancy has previously said that Fink should resign over his failure to engage with criticism of the asset manager’s ESG position.

In an interview with The Telegraph, Fancy called his former boss is an “emperor with no clothes” who is “ducking the fight” on ESG.