Showing posts with label CalPERS. Show all posts
Showing posts with label CalPERS. Show all posts

Monday, April 21, 2008

CalPERS Expands Environmental, Diversity Corporate Governance Guidelines

From CalPERS:

"CalPERS Expands Environmental, Diversity Corporate Governance Guidelines - Supports State Legislation on Climate Change

SACRAMENTO, CA – The CalPERS Board today signaled the importance of environmental disclosure and diversity of corporate boards by expanding corporate governance guidelines for portfolio companies.

The new guidelines will be added to the System’s Global Principles of Accountable Corporate Governance. These principles are used by CalPERS to vote proxies, engage management and boards of equity companies, and implement initiatives.

Both guidelines were proposed by State Controller John Chiang, a member of the CalPERS Board of Administration.

The environmental guidelines are aimed at getting companies to disclose and act upon climate risks like carbon emissions that, if unaddressed, could diminish investment returns.

To stay in step with changes in the marketplace, the pension fund’s Board adopted new corporate board diversity guidelines which will create best practices, including the practice of requiring that diversity be included among factors used to assess corporate board nominees. Also adopted was an action to develop a white paper on the topic of diversity and corporate boards to document the current profile of corporate boards and identify the best strategies for ensuring diversity of boards.

CalPERS is the nation’s largest public pension fund with assets totaling approximately $240 billion. It provides retirement and health benefits to some 1.5 million State and local public employees and their families. For more about CalPERS, visit www.calpers.ca.gov."

Friday, November 16, 2007

Senate Banking Committee hearing on Proxy Access

On November 14th, the Senate Banking Committee held a hearing on Proxy Access. The hearing was chaired by Senator Jack Reed.

In his testimony, SEC Chairman Christopher Cox noted:

" Last autumn, the U.S. Court of Appeals for the Second Circuit invalidated the SEC’s interpretation of our existing proxy access rule that had been applied at least since 1990. Indeed, in the SEC’s view, that interpretation had been in effect since 1976. But the court found the SEC’s view since 1990 to be inconsistent with its prior interpretation. At the same time, the court said that it would “take no side in the policy debate regarding shareholder access to the corporate ballot,” noting that “such issues are appropriately the province of the SEC.” This decision applies only in one of the 12 judicial circuits in America. And it has created great uncertainty and danger for every stakeholder in our public markets.

This uncertainty is compounded by a recent decision of the U.S. Supreme Court, which creates doubt about the state of affairs even in the Second Circuit. The Supreme Court reversed another panel of the Second Circuit in a similar case of an agency that changed its interpretation of its rules. Just as in the proxy access case, the Second Circuit rejected the agency's more recent interpretation. Justice Breyer’s opinion for the unanimous Court held that the agency’s interpretation of its own regulations is controlling unless plainly erroneous."

Senator Reed, chairing the hearing in Senator Dodd's absence, appeared stunned by this line of reasoning:

1. Reed implied that citing the 2nd Court of Appeals decision and the Supreme Court ruling was a sign desperation. The Commission is stretching the limits of legal rationality to find any justification, however tenuous, that will support approving the more restrictive proxy access proposal.

2. Reed clearly believed there is no truth to the claim (as with other claims concerning the existence of WMD in Iraq, the use of torture, lack of warning about Katrina, etc.), that heightened uncertainty requires the SEC to act now.

3. The Senator acknowledged that he is powerless to do anything to stop the SEC from approving the more restrictive proxy access proposal. Thus, we believe they will do so, despite SEC claims that "shareholder proxy access is 'a work in progress' that could end with a plan different from proposals floated this summer." We regard this statement a "head fake," designed to freeze opponents in their tracks.

We note CalPERS today announced that "Eight of the leading U.S. and international pension funds representing more than $300 billion in U.S. public equities, and the Council of Institutional Investors, with member assets exceeding $3 trillion, will hold a telephonic press conference to make an announcement and discuss the issue of access to corporate ballots to nominate directors and pending proposals before the U.S. Securities & Exchange Commission."

We believe they may announce their intention to bring a lawsuit, thus blocking (or at least slowing) any changes to current proxy access rules.