Council of Institutional Investors members today voted to seek a conference call with the board of Morgan Stanley as well as dissidents trying to remove the firm's chairman and CEO, Philip Purcell, said Richard Ferlauto, manager-pension investments with the $600 million American Federation of State, County and Municipal Employees Pension Plan, Washington. Mr. Ferlauto said the council hopes to arrange the call in the near future; no date has been set. The conference call will target concerns about corporate performance and management at Morgan Stanley.
Separately, the CII at its conference in Washington unanimously endorsed resolutions calling for shareholders to support proposals requiring board directors to be elected with a majority of shareholder votes and supporting defined benefit plans as the best means to provide retirement and income security.
Also at the conference, Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, criticized pension funds for pursuing social, labor and environmental issues in corporate governance activities, saying they are not related to shareholder value. "Advancing social and environmental issues don't necessarily benefit shareholders," Mr. Donohue said at a panel on corporate governance. "Boards of directors shouldn't be used to advance political agendas," he added.
That position was disputed by Alan Hevesi, New York state controller and sole trustee of the $117.45 billion New York State Common Retirement Fund, Albany, and others. Mr. Hevesi argued corporations face significant liabilities from environmental damage and inequities in labor practices, all of which affect shareholder value. Ralph V. Whitworth, principal of Relational Investors, said the use of social or related criteria often "enlightens board members" to corporate practices and risks.
