The Giant of Shareholders, Quietly Stirring
There is agreement, however, that the firm has become more active in recent years, as other shareholders, too, have been expressing themselves more forcefully. It’s easy to be cynical about the value of voting on what are ultimately nonbinding resolutions that companies can ignore. But investors can now wield more power than in the past, partly because of recent laws that require companies to hold a vote on issues like executive pay. On Tuesday, in fact, shareholders of JPMorgan Chase will meet in Tampa, Fla., where the company is expected to announce the results of a the vote on an unusually tense confrontation over a motion to split the roles of chairman and C.E.O., both now held by Jamie Dimon.
BlackRock’s influence over the governance of corporations has increased as the company itself has expanded. It gained prominence during the financial crisis when Laurence D. Fink — a BlackRock co-founder and its current chief executive — became the government’s go-to guy to analyze and manage hard-to-value assets. BlackRock expanded this expertise into a separate business, advising troubled governments around the world, like Greece and Ireland. In 2009, the firm bought Barclays Global Investors in a $13.5 billion cash-and-shares deal that transformed BlackRock overnight into the world’s largest asset manager. BlackRock controls both actively managed shares, and millions more that sit in exchange-traded funds.
“BlackRock is the silent giant,” said Gerald Davis, a professor of management and organizations at the University of Michigan. He said the firm had almost no name recognition, despite managing more money than household names like Vanguard and Fidelity. “No one really knows about BlackRock but they are incredibly powerful.”
MS. EDKINS, an understated 43-year-old from New Zealand, leads BlackRock’s corporate governance effort. She got her first taste of annual reports and the corporate documents that would become her future at the University of Otago as an economics teaching assistant, where she analyzed annual reports to see which companies were disclosing their environmental impact. The experience of parsing often-dry sentences didn’t immediately turn Ms. Edkins into a corporate-governance geek. Instead, she landed a job at New Zealand’s central bank and later at the British High Commission in Wellington.
In 1997, she moved to England without a job and answered an ad in The Financial Times for a “corporate government executive” at Hermes Pensions Management. “I had to look up what corporate governance was,” she said, laughing.
Eight years later, Ms. Edkins moved to Governance for Owners, a small shareholder advisory firm in London. In an odd twist, Governance for Owners was recently charged with voting BlackRock’s shares in the proxy contest over splitting the role of chairman and chief executive at JPMorgan Chase. United States law requires BlackRock, thanks to its ties to a bank holding company, to turn over its votes to an independent third party when ownership exceeds a certain threshold. This provision is aimed at preventing any one company from having inordinate influence over the banking industry.
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