New | BlackRock takes an activist stance on voting rights in Hong Kong to foster corporate governance

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Asset manager wants companies to split the roles of chairman from CEO, and will oust directors who attend fewer than 75 per cent of board meetings for two straight years

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BlackRock’s Asia Pacific Head of Investment Stewardship Pru Bennett says the world’s largest asset manager wants to take an activist role to push for better corporate governance. Photo: SCMP

Enoch Yiu

Published: 5:32pm, 21 Aug 2016Updated: 10:59pm, 21 Aug 2016

BlackRock Inc, with US$4.8 trillion of global assets under management, said it plans to use its clout to improve corporate governance among the Hong Kong-listed companies in which it owns shares, to foster the principles of accountability, transparency, fairness and responsibility.

The world’s largest asset manager, which owns shares in 850 companies in Hong Kong, said it aims to vote in 100 per cent of the shareholders’ meetings that it’s entitled to attend, according to a set of guidelines in May setting out how it would exercise its rights.

“We want to use the guidelines to communicate with companies about our expectations of their corporate governance,” said BlackRock Asset Management North Asia’s director Pru Bennett, in an interview with the South China Morning Post.

The Hong Kong guidelines follow those issued in 2011 for Australia by the New York-based fund. Next on the list will be guidelines for mainland China companies by the end of 2016, followed by Singapore, South Korea and Taiwan.

BlackRock’s activist move is also consistent with the Hong Kong securities watchdog’s push for fund managers and institutional investors to adopt “responsible ownership” of publicly traded companies.