According to Business Insider report: As scrutiny from lawmakers intensifies, BlackRock is restructuring a crucial team handling relationships with government officials and regulators. The asset management firm, led by CEO Larry Fink, announced in an internal memo that it is looking for a new head of US government affairs and public policy and a new head of state government affairs, both based in Washington, D.C.
The restructuring comes as BlackRock - managing a hefty $9.1 trillion - faces growing reputation pressures and complex policy challenges in the increasingly divisive US political environment. John Kelly, BlackRock's global head of corporate affairs, emphasized in the memo that the firm needs to alter its organization to meet these challenges and provide comprehensive coverage.
Over recent years, BlackRock has come under criticism for its investments that consider environmental, social, and corporate governance factors. Lawmakers have suggested that BlackRock is prioritizing climate action and workforce diversity over the interest of investors, challenging its vast voting power on behalf of these investors.
Internally and industry-wide, the saga is seen as a significant issue leading to employee frustration and unwanted mainstream attention on the asset management giant. The restructuring includes a renamed government affairs and public policy group and several shifted roles within the public policy group.
The global asset management leader may face even more significant hurdles as US financial regulators indicate plans to increase oversight of asset managers. BlackRock and similar firms have been lobbying for years to avoid being classified as globally systemically important financial institutions, which would result in more intense supervisory measures. This move is significant, as management and Exchange-Traded Funds (ETFs) see an increasing migration of key financial activities from banks to asset management firms.