Boards need to strengthen their independence and diverse representation, according to BlackRock Investment Stewardship’s (BIS) 2022 Voting Spotlight report.

In the 2022 proxy season, the world’s largest fund manager conducted a record 3,690 engagements with 2,460 portfolio companies in 55 markets, compared to 3,650 engagements the previous season.

BlackRock most frequently engaged with companies on board quality and effectiveness, followed by financial resilience and climate and natural capital.

Board quality

BlackRock engaged with 2,330 companies on board quality this season, most often due to a lack of board independence, a lack of diversity, and director overcommitments.

The fund manager voted against more than 2,500 directors at 1,521 companies globally due to independence concerns, with a “concentration of such voting” in the Asia Pacific region and Europe, Middle East, and Africa (EMEA).

This year, the fund manager was “more supportive” of management in the Americas and EMEA, where companies “made significant progress on the governance and sustainability matters that inform our voting.”

In addition, BlackRock supported more directors at U.S. and EMEA-listed companies with material climate risk in their business models as they “improved their climate action plans and disclosures.”

Prescriptive ESG proposals

In part due to the Securities and Exchange Commission (SEC) changing guidance related to Rule 14a-8 no-action letters, the U.S. experienced a 133% increase in the number of environmental and social (E&S) shareholder proposals filed with companies this season.

According to the report, BlackRock supported 24% of E&S shareholder proposals subject to a vote at U.S.-listed companies in the 2022 proxy season, down from 43% last season. This was primarily due to proposals becoming “overly prescriptive” and constraining on management.

“BIS observed and assessed several notable themes that ultimately reduced our support for some shareholder proposals,” the report reads. “For instance, such proposals sought decommissioning fossil fuel assets, elimination of financing and insurance underwriting for fossil fuel projects, and cessation of fossil fuel exploration and development.”

Climate and natural capital

This season, BlackRock supported 33 of the 121 environmental shareholder proposals subject to a vote globally.

Due to the “marked progress” made by companies to strengthen their climate disclosure, the fund manager opposed just 176 directors due to sustainability concerns this season, compared to 254 the previous season.

BlackRock also expects biodiversity to become a larger part of corporate disclosure and considerations, going forward. In the 2022 proxy season, the fund manager encouraged companies to report on plans to incorporate business plans consistent with the sustainable use and management of clean air, water, land, and minerals.

“In cases where we had concerns that natural capital-related risks and opportunities were not being effectively managed, overseen, or disclosed, BIS may have withheld support for director elections and/or supported shareholder proposals that we believed were business relevant and addressed a material gap in a company’s approach,” BlackRock said.


BlackRock engaged with 1,350 companies on compensation, the majority of which were “concentrated in EMEA.”

“We observed companies in this region are making efforts to better explain how their policies and pay outcomes are tied to strategy and long-term financial performance,” the report reads. This is, in part, due to corporate disclosure more closely aligning with the EU Shareholder Rights Directive II (SRD II) and improved response to shareholder feedback.

In general, companies also “improved their explanations” of how short- and long-term incentive plans complement one another and are effective in rewarding executives who deliver long-term value.

However, the fund manager noted many companies “continued to tie a meaningful portion of incentive pay exclusively to increases in stock price that may be transitory in nature. We believe a narrow focus on short-term stock price or a company’s profit may be inconsistent with, or even detrimental to, long-term shareholder value creation.”