Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. Print
October 19, 1998 01:00 AM

CALPERS ADDRESSES FOREIGN PROXY ISSUES

Steve Hemmerick
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    SACRAMENTO, Calif. -- The $133 billion California Public Employees' Retirement System wants to form international alliances for shareholder activism.

    The alliance proposal, which could be approved by trustees on Oct. 19, would be a major change in the way the nation's largest pension fund could pressure companies to make changes.

    CalPERS and other pension funds long have had an alliance in the United States through the Council of Institutional Investors. Now, CalPERS staff is suggesting alliances with investors in Germany, France, Japan and the United Kingdom -- countries in which CalPERS has become more active in proxy voting.

    The proposal also calls for a kind of international investor reciprocity so institutional investors can be "louder and stronger," according to a staff memo to trustees.

    "Each alliance participant will agree to generally support the other's 'home market' governance principles," said the memo from Bob L. Bolt, CalPERS senior investment officer for public markets, and Kayla J. Gillan, fund general counsel.

    Sheryl K. Pressler, chief investment officer, and James E. Burton, chief executive officer, also support the proposal.

    On many issues, CalPERS staff hopes to be speaking with one voice internationally. "Although each alliance relationship will ensure that participants retain the freedom to act separately and independently at their own discretion, the goal will be to build a relationship such that variances are infrequent," stated the memo.

    "An alliance participant, when dealing with a 'home market' governance issue, will be speaking not only for its own fund, but also for the alliance's foreign participants," it added.

    The proposal also would help CalPERS overcome a key problem it has encountered in international corporate governance: how best to act on governance issues in countries with which it is relatively unfamiliar. The memo suggests alliance members could take the lead in their home country, so corporate governance proposals "can be conveyed in the language and manner most likely to be influential in the market."

    Rick Bennett, director of governance for LENS Investment Management, Washington, said such an international alliance "is the wave of the future." LENS, an activist money manager, buys stocks in underperforming companies and uses shareholder rights to make changes in the board and management.

    Institutional shareholders need to invest globally, and "they want to ensure that the companies they are investing in are accountable to shareholders," Mr. Bennett said. To ensure accountability, shareholders have to develop international relationships, he said.

    CalPERS also plans to expand its Internet Web site. The staff memo says the Shareowner Alert page, while well received, is "limited by its scope of information and architecture."

    Fund officials suggest remaking the Web site by:

    * Detailing information about the performance of its "Focus List" companies -- those it considers key underperformers among its stockholdings -- and providing information about communication with those companies.

    * Establishing a library of corporate governance literature with an electronic search engine to find library items.

    * Building a compendium of corporate governance principles from CalPERS and other organizations.

    * Posting CalPERS' decisions on specific proxy votes so that other investors can consider them when deciding proxy issues.

    * Publishing CalPERS' and other opinion pieces.

    * Offering a guest book so visitors can receive update information from CalPERS.

    An additional CalPERS staff idea is an outreach program. The pension fund would seek to develop new relationships and start dialogues with shareholders who have been historically passive, such as mutual funds.

    The proposal also calls for publishing CalPERS' view on corporate governance issues in publications produced in collaboration with other activist investors, and accepting speaking engagements domestically and internationally.

    Beside the outreach program, CalPERS staff wants to continue building relationships with regulatory agencies. Staffers propose sending comments on key issues affecting shareholder voting rights to the Securities and Exchange Commission, the New York Stock Exchange and the Financial Accounting Standards Board.

    Staff also would send fund officials' views to members of Congress on issues affecting competition between the global securities exchanges.

    Other recommendations include developing so-called cutting edge issues for inclusion in shareholder proposals.

    The CalPERS staff recommends corporate audit committees retain an independent consultant to perform a corporate governance audit and report to shareholders.

    The audit would describe issues affecting the independence of a company's auditor, such as the amount and kind of consulting work performed by the auditor.

    The proposal also suggests companies share Year 2000 compliance issues with shareholders so that they understand the impact of those issues.

    Finally, the staff suggested promoting academic research on current issues relating to corporate governance.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    Private Markets
    Sponsored Content: Private Markets

    Reader Poll

    August 10, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Gaining Momentum: Where Next for Trend-Following?
    The market opportunity in U.S. residential mortgage-backed securities
    Credit Indices Evolve with Enhanced Data Inputs
    Hedge Funds 2.0: Back to the future
    How Has 2022's Carnage Reshaped Global Stock and Bond Markets?
    Crossroads: Politics, Inflation, & Bonds
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    August 1, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit