BlackRock to boost shareholders' power after backing reform elsewhere

By Ross Kerber

BOSTON (Reuters) - Top asset manager BlackRock Inc said on Wednesday it plans to give shareholders new rights to nominate directors, bringing its corporate governance in line with policies it has backed elsewhere.

BlackRock, the world's largest asset manager, said it would amend its bylaws to allow so-called "proxy access" rights for groups of investors owning at least three percent of its shares, pending shareholder approval, a popular change other companies have made this year.

"We continually evaluate our governance policies to ensure they reflect the latest best practices," BlackRock Chief Executive Laurence Fink said in a statement.

The management-backed proposal would make it easier for groups of BlackRock investors to run their own director candidates. Similar proposals filed by corporate governance activists, including New York City Comptroller Scott Stringer, were a major focus of last spring's proxy season.

Of the 88 such proposals voted on by investors so far this year, 52 received a majority of votes cast, according to ISS' Voting Analytics Database. About 50 companies have adopted new proxy access rules this year or were moving to do so, ISS said.

Skeptics worry the moves could encourage disruptive activist investors to run candidates as a way to influence a company's leadership. Other big fund managers like Fidelity Investments and Vanguard Group have largely opposed the changes or backed them on stricter terms.

But BlackRock funds have mainly voted in support of the proxy access proposals, arguing they can focus boards on shareholder interests. With $4.7 trillion under management as of June 30, New York-based BlackRock has far-reaching influence over how companies govern themselves.

If approved by shareholders at next year's annual meeting, BlackRock said it would amend its bylaws so that groups of up to 20 shareholders could nominate up to 25 percent of its board, if the group owned at least three percent of its stock for at least three years.

(Reporting by Ross Kerber; Editing by Richard Valdmanis and Richard Chang)

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