Tag: corporate board

CalSTRS Updates Corporate Governance Principles; Supports Board Nomination Power For Prominent Shareholders

board room chair

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.

CalPERS, CalSTRS See Results From Initiative To Add Women To All-Male Boards

Board room

Earlier this summer, CalPERS and CalSTRS teamed up to try to improve the diversity of all-male corporate boards in California. The funds’ research had shown that 131 California-based companies had no women on their boards, so the pension giants sent letters to those companies to gauge their interest in improving the male to female ratio of their boards.

Early returns are in, and the initiative is already producing results. From IR Magazine:

At least 15 companies based in California have added a female director to their all-male boards and 35 have indicated a willingness to do so after a board gender diversity campaign launched by state pension giants CalSTRS and CalPERS targeting 131 companies in the state.

CalSTRS, the largest educator-only pension fund in the world with $187 bn in assets under management, along with CalPERS, which manages some $301 bn, began the campaign four months ago to target companies in its home state with all-male boards.

As part of the campaign, the two pension funds sent a letter to the companies offering their expertise to help them appoint women to their boards. Along with the letter, the campaigners included a copy of the National Association of Corporate Directors report ‘The Diverse Board: Moving from Interest to Action’ to illustrate the potential advantages of appointing women to a board.

CalPERS and CalSTRS started the campaign after learning that nearly 25 percent of the 400 largest publicly traded companies in California had no women on their boards. Only two of those 400 companies had boards where a majority of members were female.