World’s Largest Asset Manager: CEOs Should Not Serve on Other Boards
BlackRock voted against 94 CEOs who wanted to serve on more than one board outside their company
The world’s largest asset manager is taking aim at chief executives who sit on the board of directors of different companies. In a 32-page report, the company showed it had voted against 94 different CEOs who ran for re-election to the boards of firms that are not their own.
World’s Largest Asset Manager Has Concerns
BlackRock has raised concerns that CEOs are taking too much time to advise other companies. BlackRock is concerned about any CEO who serves on more than one board that is not their own. In the past, they had viewed two outside board seats as manageable.
But the company has established a new policy this year to discourage the behavior.
During the previous proxy season, it had voted against 32 CEOs who we’re in that position. This year, the figure has increased dramatically.
“It sounds fine to sit on multiple boards, but what happens when something goes wrong at a company?” BlackRock vice chairman Barbara Novick said in an interview with Reuters. “More and more companies are limiting how many outside boards their CEOs can sit on.”
BlackRock has $6.8 trillion under management. Therefore, it wields significant influence in the structure of corporate boards. The company’s report also showed that it opposed directors at 52 companies who failed to meet BlackRock’s standards on issues like gender, ethnic diversity, age diversity, and other types of diversity standards.
Despite this report, BlackRock has faced criticism recently over its environmental and investing record.
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