CalSTRS has updated its set of corporate governance principles to include support for proxy access – the right of a shareholder to nominate corporate board members.
The pension fund supports giving proxy access to shareholders that own at least three percent of a company’s shares for at least three years.
More from a release:
The updated principles, for the first time, specify CalSTRS support of proposals giving a group of shareholders, owning three percent of a company’s shares for at least three years, access to board nominations and to the company’s proxy statement. The CalSTRS Corporate Governance Principles lay out the basis for how the fund carries out its corporate governance initiatives. The Investment Committee adopted the updates at its February 6 meeting.
“CalSTRS has steadfastly supported the 2011 rule, proposed by the Securities and Exchange Commission, that allows shareholder groups access to board director nominations with what we call a three-and-three ownership structure,” said CalSTRS Director of Corporate Governance Anne Sheehan. “We firmly believe this is the most appropriate threshold for proxy access.”
Without a universal rule from regulators, CalSTRS and like-minded institutional investors have waged proxy access efforts, company by company.
“CalSTRS will, in the coming proxy season, support any shareholder proposal that includes a three-and-three group structure,” said Ms. Sheehan. “Our intention is to oppose any proxy access proposal with a structure more onerous than three-and-three ownership by a group of shareholders.”
CalSTRS Corporate Governance unit will also urge fellow shareholders to withhold their votes from company directors who either exclude a three-and-three shareholder proposal from the proxy statement, or who deliberately preempt such a shareholder proposal with one of their own that establishes more excessive thresholds.
Read the full release here.
Read the pension fund’s Corporate Governance Principles here.