CalPERS board is expected to weigh a move that would modify a recent governance change calling for the full board in conjunction with the CEO to hire, evaluate and terminate the pension fund's CIO.
Under the proposal, which is expected to be decided by the full board of the $449.1 billion California Public Employees' Retirement System, Sacramento, as early as April, such power would be delegated by the board to its at least seven-member performance, compensation and talent management committee and the CEO.
In September, the board approved a governance change stipulating that the CEO and board would share the responsibility to hire, evaluate and terminate the CIO. Prior to that change, the CEO had that authority. The existing delegation of authority from the full board to the performance, compensation and talent management committee advises the CEO on the hiring and termination of the CIO and certain other executive staff members.
CalPERS is currently in the process of hiring a new CIO to replace former CIO Yu "Ben" Meng, who resigned Aug. 5 in the wake of a complaint filed with a state watchdog about his disclosure of personal private equity investments.
If approved, the delegation would not affect CalPERS current CIO search.
Interviews for the current CIO search are being conducted by two panels that include three board members each selected by board president Henry Jones. Selection of a new CIO is expected before the end of the first quarter.
Board member Margaret Brown at a Feb. 17 performance, compensation and talent management committee meeting questioned the new delegation of authority.
"I don't know that this future delegation purports with the current process we are using" or that the board delegated to the board president the power to select interview panels, Ms. Brown said.
Mr. Jones said that the governance committee had approved a proposal for the CEO and board to share responsibility for the hiring the CIO.
"As a result of that passage in the governance committee, it delegated to the board to share in the hiring of the CIO," Mr.Jones said. "You may recognize that the board as a whole has enormous responsibility. But we all don't participate in every activity. ... I nominated six members of the board to represent the board to hire the next CIO with the provision that person will come before the full board at some point in the future."
At the Feb. 18 board meeting, Matthew G. Jacobs, CalPERS general counsel, explained that CalPERS does not have a written delegation of authority reflecting the board and CEO sharing the responsibility of hiring, firing and oversight of the CIO.
