Two of America's biggest passive funds are about to get aggressive with companies
REUTERS/Tim Shaffer
On Wednesday, the Wall Street Journal reported that both companies are becoming more involved with the companies they invest in and their corporate boards.
The article quotes a letter from Vanguard CEO Bill McNabb, who said, "In the past, some have mistakenly assumed that our predominantly passive management style suggests a passive attitude with respect to corporate governance. Nothing could be further from the truth."
The letter, which encouraged companies to engage more with investors, was sent to several hundred public companies.
BlackRock also recently revised voting guidelines to provide more oversight in board re-elections. The new guidelines address issues such as long tenures, board diversity, lack of attendance, and protecting shareholder rights. BlackRock could vote against re-election if these issues come up.
McNabb told the WSJ that given the size of their holdings in major U.S. companies, the move into corporate governance is appropriate. "We should be doing this. We felt like we should take it to another level," he told the publication.
Vanguard holds about $3 trillion in assets and BlackRock holds $4.65 trillion globally.
- A centenarian who starts her day with gentle exercise and loves walks shares 5 longevity tips, including staying single
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Having an regional accent can be bad for your interviews, especially an Indian one: study
- Dirty laundry? Major clothing companies like Zara and H&M under scrutiny for allegedly fuelling deforestation in Brazil
- 5 Best places to visit near Darjeeling
- Climate change could become main driver of biodiversity decline by mid-century: Study
- RBI initiates transition plan: Small finance banks to ascend to universal banking status