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PRI reporting framework 2017

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage (Not Completed)

SG 02. Publicly available RI policy or guidance documents (Not Completed)

SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, employee conduct (e.g., personal trading and outside activities) and other potential conflicts of interest that are designed to ensure that all client accounts are treated fairly over time.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.

03.3. Additional information. [Optional]

With respect to voting, BlackRock maintains policies and procedures that are designed to prevent undue influence on BlackRock's proxy voting activity that might stem from any relationship between the issuer of a proxy (or any dissident shareholder) and BlackRock, BlackRock's affiliates, a fund or a fund's affiliates. Some of the steps BlackRock has taken to prevent conflicts include, but are not limited to:

(i) BlackRock has adopted a proxy voting oversight structure whereby regional committees guide voting and stewardship activities.

(ii) The committees have adopted guidelines for each region, which set forth the firm’s views with respect to certain corporate governance and other issues that typically arise in the proxy voting context.

(iii) A global committee conducts a review, at least annually, of the proxy voting process to ensure compliance with BlackRock’s risk policies and procedures.

(iv) BlackRock maintains a reporting structure that separates the Global Head of Investment Stewardship team from employees with sales responsibilities.

(v) In certain instances, BlackRock may determine to engage an independent fiduciary to vote proxies as a further safeguard to avoid potential conflicts of interest or as otherwise required by applicable law.

SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within portfolio companies.

04.2. Describe your process on managing incidents

          We subscribe to multiple major global controversies research providers which provide alerts about incidents at public and private companies. We engage with companies that have experienced a material controversy or incident to understand what happened, whether there was a management or board failure or weakness that contributed to the incident and what remedial actions have been taken to address the issue and minimize the likelihood it would reoccur.  We may report such engagements in our quarterly reports on our website. Examples of such incidents in 2016 include unethical banking practices at US commercial bank, alleged human rights violations at a UK detention center, and misleading fuel economy testing practices at a Japanese automaker.