The 2020 summer of racial reckoning evoked a massive wave of corporate statements acknowledging the global issue of systemic racism and their social responsibility to hold themselves accountable for it.
In addition to these corporate companies, asset managers — whose job it is to manage the retirement savings of millions of Black and brown workers — also hold a weighted responsibility to assist in removing systemic racism from our economic system.
Today, nonprofit org Majority Action and the Service Employees International Union (SEIU) released Equity in the Boardroom — the first-ever comprehensive report to reveal how “business as usual” proxy voting from asset managers has shaped the nature of corporate action as it relates to racial justice in 2020.
NEW REPORT with @SEIU: @BlackRock and @Vanguard_Group voted to undermine shareholder efforts for racial equity, despite public statements in support of racial justice. More: https://t.co/ksT8kbP0Tm pic.twitter.com/UcM9GI1KNS
— Majority Action (@majorityact) December 15, 2020
The thorough report documents the roles of the world’s largest asset managers in regards to holding these corporate companies accountable for the ways in which they have addressed racial injustice this year. Specifically, for those companies who have failed to meet the standards of racially and ethnically diverse leadership boards for their stakeholders.
“While major asset managers are beginning to acknowledge their responsibility to address their role in systemic racism, following through on these commitments will require a substantial overhaul of their proxy voting priorities and processes,” the report states.
Major key findings within the report include revealing information about BlackRock and Vanguard — two of the world’s largest investment management companies — and how they both could have voted in favor of solutions that could’ve otherwise helped address substantial issues in communities of color like economic inequality, civil rights, and environmental justice.
“In 2020, 48 resolutions to improve corporate policy influence disclosures received more than 20% shareholder support across the S&P 500,” the report details. “BlackRock and Vanguard voted against every single one. At least 19 of these resolutions would have received majority support had BlackRock and/or Vanguard voted in favor.”
In addition to the report’s oversight on this new information, it also shared recommendations for large asset managers and how they can use their voting power to promote more racial justice.
These recommendations include:
- Holding boards accountable to the corporate governance best practice of diversifying boards to ensure that the perspectives of Black and brown communities are represented at the highest level of corporate decision-making.
- Holding companies accountable to improving disclosure of corporate policy influence that directly and indirectly impacts Black and brown communities.
- Supporting resolutions that seek to improve oversight of risks driven by systemic racism.
Overall, the report concludes that proxy voting decisions of asset managers can no longer be neutral in the fight against systemic racism. For actual change to happen, asset managers need to play a more active role to ensure justice is being served in corporate America.
To read the Equity in the Boardroom report in full, click here.