CalSTRS has not changed its attitude about Goldman Sachs, but Chief Investment Officer Christopher Ailman said he was “very concerned.”
The West-Sacramento-based California State Teachers’ Retirement System invests with Goldman Sachs Asset Management and owns stock in the parent company.
“The situation has not changed to this point. We feel ‘innocent until proven guilty’,” said Mr. Ailman during a panel discussion Monday on “Boards of Directors: The Buck Stops Where?” at the Milken Institute Global Conference in Beverly Hills, Calif.
“But we are very concerned about it. Goldman Sachs is a very old, very venerable financial institution” that is being compared with Drexel Burnham Lambert. Michael Milken, chairman of the Milken Institute, worked for Drexel Burnham Lambert and was convicted of securities fraud in 1990.
Mr. Ailman said Goldman has a “significant PR problem which will damage the company and its stock prices, which it already has,” he said.
Richard Ferlauto, deputy director, policy, office of investor education and advocacy at the SEC, who was also on the panel, declined to comment on an ongoing investigation.
Separately, Mr. Ailman announced that the $138 billion CalSTRS and the $213.3 billion California Public Employees’ Retirement System, Sacramento, are spearheading an effort to create a database of qualified directors for corporate boards of directors.
“There’s too much ‘group think,’” Mr. Ailman said. Directors on corporate boards tend to remain there until retirement and all shareholders can do is vote “no,” he added. Currently, Congress and the SEC are working on new regulation that could improve shareholder ability to remove directors who are not performing, he said.
“We have no interest to run an alternative slate and hand-pick directors,” he said. “We will step up and get active in helping to find board members,” Mr. Ailman said.
In an interview following the panel discussion, Mr. Ailman said that CalSTRS and CalPERS officials were discussing the project with other pension fund executives.