BlackRock pushes back against directors serving on too many tech boards

    BlackRock is clamping down on company directors in the US technology industry who sit on too many boards, as chief executive Larry Fink intensifies the fund group’s scrutiny of corporate governance.

    The world’s largest asset manager said in regulatory filings at the end of August that it had voted against the reappointment of Sanford Robertson to the board of Salesforce, where he is chair of the US software company’s governance committee.

    BlackRock claimed Robertson, who is also a founding partner of Francisco Partners, a technology-focused private equity firm, was “responsible for [a] lack of independence” on Salesforce’s board. It was the first time BlackRock voted against Robertson in the past three years.

    It also voted against Egon Durban, board director at Twitter, who sat on seven public company boards. Durban, who is co-chief executive at venture investor Silver Lake, lost the vote to stay at Twitter in May, but the company said he could remain on the board if he dropped two of his other positions.

    The crackdown on “overboarding” is a part of a broader push under Fink to improve the corporate governance of companies in which BlackRock invests.

    However, the company’s stance diverges from rival asset manager Vanguard, which voted in favour of Robertson and Durban, underscoring the different approaches investors are taking to board compositions.

    Luigi Zingales, a professor at the University of Chicago Booth School of Business, said BlackRock had positioned itself as “changing the world for the better”, whereas Vanguard “has always sold itself as the low-cost guy”.

    For three consecutive years, BlackRock has voted against Alphabet board member Ann Mather, a former chief financial officer at animation studio Pixar, because she sits on an “excessive” number of boards, the asset manager said.

    Under fire from BlackRock, Alphabet changed its board rules this year to prevent members from serving on more than five boards, including its own. Mather left the board of rental company Airbnb and computer networking company Arista Networks, but BlackRock still opposed her appointment at Alphabet’s June annual meeting. Alphabet declined to comment.

    Amazon has also come under scrutiny. BlackRock voted against Judith McGrath on Amazon’s board, saying she “has not demonstrated [an] ability to effectively represent shareholders’ best interests”. This was the first time in three years that BlackRock opposed McGrath, the former chair and chief executive of MTV.

    The dissenting votes represented rare rebukes from BlackRock, which supported more than 92 per cent of all board members in the Americas from July 2021 to the end of June this year. The fund group has previously said it wants people to serve on no more than four company boards. BlackRock declined to comment.

    Vanguard said it would generally vote against people who served on more than four public company boards, although it noted there could be exceptions. Vanguard said: “We take a case-by-case approach to evaluating potential overboarding situations.”

    BlackRock pushes back against directors serving on too many tech boards Republished from Source via

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