The proxy voting policies of the four largest asset managers show “troubling gaps” on holding companies to account on racial equity, according to new analysis from Majority Action.
In an October 2 report seen by Diligent Market Intelligence (DMI), non-profit Majority Action revealed that BlackRock, Fidelity, State Street and Vanguard all lack a proxy voting policy that comprehensively addresses the systemic risks posed by racial inequity.
The report set out a range of standards for proxy voting policies on key topics with racial equity impacts and benchmarked the four largest asset managers against those expectations.
Majority Action stated that none of the four asset managers had an explicit policy to vote for racial equity audit shareholder proposals. According to DMI’s Voting module, BlackRock voted in favor of 6.5% of racial equity audits globally in the 2023 season, down from 88.9% and 37.1% in the previous two seasons.
Their proxy voting policies did, however, partially meet expectations on racial and ethnic board diversity, and holding directors accountable via votes against relevant committee members if diversity standards are not met.
“The assessed asset managers require a substantial overhaul of their proxy voting priorities and processes, as none of the four largest asset managers fully meet expectations on mitigating the systemic risk of racial inequity,” the report reads.
Fidelity’s policies also failed to meet expectations on political spending, lobbying activity and human capital management shareholder proposals, according to the report.