San Francisco City & County Employees' Retirement System's board on Wednesday approved updates to its proxy-voting guidelines, which include addressing gender diversity on company boards of trustees, confirmed Darlene Armanino, executive assistant, in an email.
The $24.7 billion pension fund's board approved a new guideline in which SFERS will vote against "the chair of the nominating committee (or other directors on a case-by-case basis) at Russell 3000 or S&P 1500 companies when there are no women on the company's board," according to the updated guidelines. Mitigating factors, however, could include a stated commitment in the company's proxy statement to add women, or if a woman sat on the board at the prior annual meeting.
SFERS also added a note that it could vote against directors or an entire board for a company is there is a "lack of sustainability reporting in the company's public documents and/or website in conjunction with a failure to adequately manage or mitigate environmental, social and governance" risks.
Separately, the board on Wednesday approved the termination of LSV Asset Management from its $198 million active international large-cap value equity portfolio. The pension fund originally hired the manager to run its quantitative strategy in 2003, and a memo to the board from Kurt Braitberg, managing director, public markets; Alo Martins, security analyst; and Han N. Pham, senior portfolio manager, public equity, cited the staff's belief that "the best systematic (quantitative) firms continuously evolve in order to generate future excess returns" and believe "better alternatives are available for SFERS' capital." The memo also noted since 2003, when LSV was hired, excess returns have gotten lower while correlations have increased. Assets from the termination will be used to fund recent hires, the memo said.
Marisa Rosenblatt, marketing and client service analyst at LSV, could not be immediately reached to provide comment.
As of Jan. 31, the actual allocation to public equities was 34.9%.
