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In
a letter dated July 6 and provided to Reuters on Friday by a
representative of Montana Attorney General Austin Knudsen, the
group reviewed longstanding concerns about mutual fund
governance in the context of the officials' more recent efforts
to limit the growing consideration of environmental, social and
governance (ESG) factors by companies and investors.
BlackRock did not immediately comment.
The letter was addressed to ten individuals listed in a
BlackRock filing as nominees to a board that oversees BlackRock
closed-end mutual funds.
The AGs sought information on things such as financial
relationships that they wrote "could undermine director
independence."
Among other things, they said BlackRock fund trustees who serve
as directors of companies where BlackRock owns more than 5% of
shares could lead to independence concerns. They also cite how
BlackRock fund directors are responsible for dozens of funds -
exceeding BlackRock's own "overboarding" guideline for public
company boards.
Critics have raised similar issues in the past about whether
well-paid mutual fund directors are positioned to speak up. The
attorney generals apply that concern in the context of stances
BlackRock has taken on ESG issues, such as a request for
portfolio companies to account for climate change.
"It strains credulity that a director of a mutual fund would not
feel pressure against standing up to BlackRock’s ESG agenda—even
when it is not in the financial interests of the fund’s
shareholders," they wrote.
Republican state attorneys general previously have questioned
how top asset managers cast proxy votes at corporate annual
meetings, and demanded information about how they seek to tackle
climate change.
(Reporting by Ross Kerber; editing by Diane Craft)
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