CalPERS and CalSTRS have collaborated to build a network of more than 150 individuals from a diverse pool of sources to act as potential candidates for nomination to corporate boards, as CalPERS’ consultant advises it to synchronise proxy votes between internal and external portfolios.
The two Californian funds have taken the lead in building a network of diversity advocates, shareowners, companies and experts to provide a diverse pool of candidates which now includes more than 150 individuals who have participated in planning workshops and teleconferences to develop consensus on the topic.
Groups represented in the pool include New America Alliance, Catalyst, the Latino Institution for Corporate Inclusion, the Association of Asian American Investment Managers, the National Association of Corporate Directors, the Directors Council and the Toigo Foundation.
The second workshop of the group was held in conjunction with the fall meeting of the ICGN in order to broaden international participation, with funds from Canada, Sweden, Netherlands, Australia and the UK taking part.
CalPERS and CalSTRS will meet again soon to discuss the appropriate structure including a stand-alone entity, an alliance between existing groups or some hybrid.
Overseeing corporate governance at the funds is Anne Simpson senior portfolio manager global equities at CalPERS, and Anne Sheehan director of corporate governance at CalSTRS.
Meanwhile Wilshire has recently completed its review of CalPERS internally-managed corporate governance investments program concluding it was pleased with the overall quality of the personnel, systems, external managers and processes.
However it said the future direction of the program was not readily apparent given the global equity review which will include a more holistic approach incorporating insight from each area into the investment decision making and capital allocation process.
Wilshire advised that CalPERS would be a more powerful force for improved corporate governance if there was synchronicity between the proxy votes between internal and external portfolios.
Wilshire highlighted that CalPERS may vote corporate proxies for program portfolio companies one way when held in the index fund, and the external program managers may vote a different way to achieve their engagement with a company.
To solve this inconsistency Wilshire recommended that CalPERS review its procedures for proxy voting for program portfolio companies.