Corporate Name: BlackRock, Inc.(BLK)
1. Executive Summary
The purpose of this report is to evaluate the corporate governance performance of the
BlackRock, Inc. basing on its US SEC filings, and then to use the relevant findings and information to discuss the implications for the company, investors, regulators, and the economy.
While evaluating the corporate governance performance of the company, it is crucial to focus on the four pillars of corporate governance, including responsibility, accountability, transparency, and equality. As for methods, SWOT analysis and Self-Diagnostic Survey are useful.
1.3 Main Findings
According to the assessment of corporate governance performance of the company, BlackRock, Inc. is generally good with respect to protecting the stakeholders’ right and other stakeholders’ right. Nevertheless, it still has some important aspects to cope with in order to further improvement, such as board responsibility and fair treatment to small shareholders.
2. General Information and SWOT Analysis
2.1 Fundamental Information
BlackRock, Inc., founded in 1988 with base in New York City, is a leading publicly traded investment management firm. It owns $4.652 trillion of assets under management at December 31, 2014. With employees in more than 30 countries who serve clients in over 100 countries across the globe, BlackRock provides a broad range of investment and risk management services to institutional and retail clients worldwide. PNC Financial Services Group, Inc., Norges Bank Investment Management and Wellington Management Company, LLP are the top three institutional holders of the company, accounting for about 33% of the shares. Vanguard/Wellington Fund Inc., the top mutual fund holder, and Fink Laurence, the major direct holder, are holding around 3% shares of the corporation altogether.
2.2 Financial Information
In terms of financial performance, BLK shows advantages in revenue, gross margin and EPS among its competitors according to the following table. With the highest EPS while the lowest P/E ratio, the investors could get shares of BlackRock, Inc. at a relatively lower price while enjoying a higher profit, which is an advantage for the company’s future development. The stock price of BLK is USD366.05 on May 5, 2015. Direct Competitors
Gross Margin (ttm):
LM = Legg Mason Inc.
STT = State Street Corporation
UBS = UBS Group AG
*Source from Yahoo Finance
2.3 SWOT Analysis
A SWOT analysis is a tool that companies use in order to understand what they do well and where they could improve. Strengths and weaknesses describe the internal perspective of a company which can be controlled and influenced. Opportunities and threats, however, are concerned with the market which cannot be controlled.
As for strength, BLK specially organizes a team named Corporate Governance and Responsible Investment (CGRI) to help protect its customers’ right. Because BLK is an asset management corporation, it has to evaluate the project and the company which it invests in. The establish of the CGRI is in purpose of evaluating and engaging with invested companies on environmental, social, and corporate governance issues (ESG) on behalf of BlackRock's clients globally. In order to safeguard the right of its shareholders, BLK also develops an electronic voting system to ensure every shareholders could exercise their rights. Besides, shareholders of BlackRock can hold directors accountable by removing them from office if they fail to act on their behalf.
As for weakness, BLK does not take efforts in protecting the right of minority shareholders. It avoid the cumulative voting to come into effect and reject the small shareholder to nominate the directors of the executive team. Moreover, the