Item 1 Election of Directors
“It has always been important that BlackRock’s Board of Directors functions as a key strategic and governing body that challenges our leadership team to be better and more innovative.”
Laurence D. Fink
Chairman and Chief Executive Officer
Our Board has nominated 18 directors for election at this year’s Annual Meeting on the recommendation of our Governance Committee. Each director will serve until our next annual meeting and until his or her successor has been duly elected, or until his or her earlier death, resignation or retirement.
We expect each director nominee to be able to serve if elected. If a nominee is unable to serve, proxies will be voted in favor of the remainder of those directors nominated and may be voted for substitute nominees, unless the Board decides to reduce its total size.
If all 18 nominees are elected, our Board will consist of 18 directors, 15 of whom, representing approximately 83% of the Board, will be “independent” as defined in the New York Stock Exchange (the “NYSE”) listing standards.
Stockholder Agreement with The PNC Financial Services Group, Inc.
BlackRock’s stockholder agreement with The PNC Financial Services Group, Inc. (the “PNC Stockholder Agreement”) provides, subject to the waiver provisions of the agreement, that BlackRock will use its best efforts to cause the election at each annual meeting of shareholders so that the Board will consist of:
- no more than 19 directors,
- not less than two nor more than four directors who will be members of BlackRock management,
- two directors who will be designated by PNC, and
- the remaining directors being independent for purposes of the rules of the NYSE and not designated by or on behalf of PNC or any of its affiliates.
The PNC Financial Services Group, Inc. (“PNC”) has designated one member of the Board, William S. Demchak, Chairman, President and Chief Executive Officer of PNC. PNC has notified BlackRock that for the time being it will not designate a second director to the Board, although it retains the right to do so at any time in accordance with the PNC Stockholder Agreement. PNC has additionally been permitted to invite an observer to attend meetings of the Board as a non-voting guest. The PNC observer is Gregory B. Jordan, the General Counsel and Head of Regulatory and Governmental Affairs of PNC. Laurence D. Fink and Robert S. Kapito are members of BlackRock’s management team and are currently members of the Board. For additional detail on the PNC Stockholder Agreement, see “Certain Relationships and Related Transactions – PNC Stockholder Agreement” on page 40.
Majority Vote Standard for Election of Directors
Directors are elected by a majority of the votes cast in uncontested elections (the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that director nominee). In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for election of directors would be a plurality of the shares represented in person or by proxy at any meeting and entitled to vote on the election of directors. Whether an election is contested is determined seven days in advance of when we file our definitive Proxy Statement with the SEC.
Director Resignation Policy and Mandatory Retirement Age
Under the Board’s Director Resignation Policy, any incumbent director who fails to receive a majority of votes cast in an uncontested election must tender his or her resignation to the Board. The Governance Committee would then make a recommendation to the Board about whether to accept or reject the resignation or take other action. The Board will act on the Governance Committee’s recommendation and publicly disclose its decision and rationale within 90 days from the date the election results are certified. The director who tenders his or her resignation under the Director Resignation Policy will not participate in the Board’s decision.
The Board has established a mandatory retirement age of 75 years for directors, as reflected in BlackRock’s Corporate Governance Guidelines.
Director Nomination Process
The Governance Committee oversees the director nomination process. The Committee leads the Board’s annual review of Board performance and reviews and recommends to the Board BlackRock’s Corporate Governance Guidelines, which include the minimum criteria for membership on the Board. The Governance Committee also assists the Board in identifying individuals qualified to become Board members and recommends to the Board a slate of candidates, which may include both incumbent and new director nominees, to submit for election at each annual meeting of shareholders. The Committee may also recommend that the Board elect new members to the Board to serve until the next annual meeting of shareholders.
Identifying and Evaluating Candidates for Director
The Governance Committee seeks advice on potential director candidates from current directors and executive officers when identifying and evaluating new candidates for director. The Governance Committee also may direct management to engage thirdparty firms that specialize in identifying director candidates to assist with its search. Shareholders can recommend a candidate for election to the Board by submitting director recommendations to the Governance Committee. For information on the requirements governing shareholder nominations for the election of directors, please see “Deadlines for Submission of Proxy Proposals, Nomination of Directors and Other Business of Shareholders” on page 92.
The Governance Committee then reviews publicly available information regarding each potential director candidate to assess whether the candidate should be considered further. If the Governance Committee determines that the candidate warrants further consideration, then the Chairperson (or a person designated by the Governance Committee) will contact the candidate. If the candidate expresses a willingness to be considered and to serve on the Board, then the Governance Committee typically requests information from the candidate and reviews the candidate’s accomplishments and qualifications against the criteria described below.
The Governance Committee’s evaluation process does not vary based on whether a candidate is recommended by a shareholder, although the Governance Committee may consider the number of shares held by the recommending shareholder and the length of time that such shares have been held.
Criteria for Board Membership
Director Qualifications and Attributes
The Governance Committee and the Board take into consideration a number of factors and criteria in reviewing candidates for nomination to the Board. The Board believes, that at a minimum, a director candidate must demonstrate, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Board’s oversight of the business and affairs of BlackRock. Equally important, a director candidate must have an impeccable record and reputation for honest and ethical conduct in his or her professional and personal activities.
In addition, nominees for director are selected on the basis of experience, diversity, knowledge, skills, expertise, ability to make independent analytical inquiries, understanding of BlackRock’s business environment and a willingness to devote adequate time and effort to the responsibilities of the Board.
BlackRock and its Board believe diversity in the boardroom is critical to the success of the Company and its ability to create long-term value for our shareholders. The Board has and will continue to make diversity in gender, ethnicity, age, career experience and geographic location – as well as diversity of mind – a priority when considering director candidates. The diverse backgrounds of our individual directors help the Board better evaluate BlackRock’s management and operations and assess risk and opportunities for the Company’s business model. BlackRock’s commitment to diversity enhances Board involvement in our Company’s multi-faceted longterm strategy and inspires deeper engagement with management, employees and clients around the world.
Our Board has nominated 18 directors for election, 15 of whom are independent. The Board includes 5 women, 1 of whom is African American, and 6 directors who are non-U.S. or dual citizens. Several of our nominees live and work overseas in countries and regions that are key areas of growth and investment for BlackRock, including Mexico, Canada, the United Kingdom and Continental Europe.
As BlackRock’s business has evolved, so has its Board. Our Board consists of senior leaders (including 12 current or former company CEOs) with substantial experience in financial services, consumer products, manufacturing, technology, banking and energy, and several directors have held senior policy and government positions. To learn more about our Board, we encourage you to visit our website at http://ir.blackrock.com/board-of-directors. Core qualifications and areas of expertise represented on our Board include:
|Senior Executive & Corporate Governance||Public Company & Financial Reporting|
|Directors bring valuable senior executive experience on matters relating to corporate governance, management, operations and compensation.||Directors have experience in the oversight of internal controls and reporting of public company financial and operating results.|
|Global Business||Public Policy & Government/Regulatory Affairs|
|Directors bring international business strategy, operations and substantive expertise in international matters relevant to BlackRock’s global business.||Directors possess insight and expertise in managing governmental and regulatory affairs and their potential impact on BlackRock’s business operations.|
|Financial Services||Branding & Marketing|
|Directors possess in-depth knowledge of the financial services industry or asset management and provide valuable perspectives on issues faced by BlackRock.||Directors bring expertise in brand development, marketing and sales in local markets at a global scale relevant to BlackRock’s global business.|
|Risk Management & Compliance||Technology|
|Directors have experience in risk management and compliance oversight|
relevant to exercising corporate and fiduciary responsibilities.
|Directors possess experience in the developing and embracing new technology as well as leading innovation initiatives at companies.|
Board Tenure and Size
To ensure the Board has an appropriate balance of experience, continuity and fresh perspective, the Board considers, among other factors, length of tenure when reviewing nominees. The average tenure of BlackRock’s director nominees is approximately 7 years, while the average tenure for independent director nominees is approximately 5 years.
Six directors, comprising 33% of the Board, have served more than 10 years and bring a wealth of experience and knowledge concerning BlackRock. Five directors, comprising 28% of the Board, have served between 5 and 10 years.
Following the 2018 Annual Meeting of Shareholders, assuming all of the nominated directors are elected, there will be seven directors, comprising 39% of the Board, who have joined the Board within the past 5 years and bring fresh perspective to Board deliberations.
The Board has not adopted a policy that limits or sets a target for Board size and believes the current size and diverse composition of the Board is best suited to evaluate management’s performance and oversee BlackRock’s global strategy and risk management. As described in “Board Evaluation Process” on page 23, the Governance Committee and the Board evaluate Board and Committee performance and effectiveness on at least an annual basis and, as part of that process, ask each director to consider whether the size of the Board and its standing Committees are appropriate.
Compliance with Regulatory and Independence Requirements
The Governance Committee takes into consideration regulatory requirements, including competitive restrictions and financial institution interlocks, independence requirements under the NYSE listing standards and our Corporate Governance Guidelines in its review of director candidates for the Board and Committees. The Governance Committee also considers a director candidate’s current and past positions held, including past and present board and committee memberships, as part of its evaluation.
Service on Other Public Company Boards
Each of our directors must have the time and ability to make a constructive contribution to the Board as well as a clear commitment to fulfilling the fiduciary duties required of directors and serving the interests of the Company’s shareholders. BlackRock’s CEO does not currently serve on the board of directors of any other public company, and none of our current directors serve on more than four public company boards, including BlackRock’s Board.
Director Candidate Search
Consistent with BlackRock’s age-based retirement policy, at least 6 of BlackRock’s current directors will retire within the next 6 years, inclusive of Messrs. Al-Hamad and Grosfeld. In order to maintain a Board with an appropriate mix of experience and qualifications, the Governance Committee, with the help of management and an outside consultant, engages in a year-round process to identify and evaluate new director candidates in conjunction with its recurring review of Board and Committee composition. Consistent with our long-term strategic goals and the qualifications and attributes described above, search criteria include significant experience in financial services, the technology sector and consumer branding, as well as international experience. In March of this year, the Governance Committee selected William E. Ford, Margaret L. Johnson and Mark Wilson as director candidates with significant leadership and experience in asset management, technology and international financial services, respectively, and recommended each to the Board for consideration as director candidates for the Board. Ms. Johnson was recommended for consideration to the Governance Committee by a third-party search firm and Messrs. Ford and Wilson were referrals from our CEO. On March 15, 2018, following a review of the candidates’ qualifications and independence, the Board voted unanimously to elect each director candidate to our Board.
For this year’s election, the Board has nominated 18 director candidates. The Board believes these director nominees provide BlackRock with the combined depth and breadth of skills, experience and qualities required to contribute to an effective and wellfunctioning Board. The composition of the current Board reflects a diverse range of skills, qualifications and professional experience that is relevant to our global strategy, business and governance.
The following biographical information about each director nominee highlights the particular experience, qualifications, attributes and skills possessed by each director nominee that led the Board to determine that he or she should serve as director. All director nominee biographical information is as of March 29, 2018.