The Teachers' Retirement Board is charged with maintaining a strong, stable fund in order to pay benefits to CalSTRS members
and their survivors. To fulfill that responsibility, the board understands the CalSTRS portfolio as the foundation of our
members' retirement security and that good corporate governance is essential to the safety of the portfolio.
All activities of the Corporate Governance program are guided by the CalSTRS Corporate Governance Principles. The principles not only lay the foundation of our proxy voting activities but all of the activities including corporate engagements and market-wide governance initiatives.
CalSTRS Corporate Governance program is focused on the following strategic objectives:
As a large and long-term investor, CalSTRS is in a position to exert influence on the corporations in which it has invested.
CalSTRS appreciates and, with prudence and care, uses its opportunity to vote on decisions affecting the guidance and well-being
of those investments.
Read more about corporate governance policies.
As a long-term asset owner, CalSTRS believes that corporate directors work on behalf of share owners and that the ability to
change our representatives in the boardroom is fundamental to shareholder democracy.
CalSTRS actively votes its proxies to support corporate board members and resolutions which align with our interests and
philosophy.
Read CalSTRS news releases discussing proxy access.
CalSTRS believes that a thorough review of pay practices is an important fiduciary duty for both boards of directors of
corporations and institutional investors.
Our principles for executive compensation are based on a philosophy that:
- Promotes alignment of interests between management and shareholders
- Promotes and creates long-term value
- Is flexible enough to address changing market conditions
CalSTRS has provided documentation regarding its stance on executive compensation:
As CalSTRS Corporate Governance staff prepares for the 2011-12 proxy season, we wanted to offer an opportunity to reflect on the lessons learned from the past year - the first with mandatory Say-on-Pay at a majority of U.S. companies.
We believe compensation should be based on:
- An alignment of interest between management and shareholders.
- The promotion of long-term value - performance based.
- The flexibility to address changing market conditions.
CalSTRS has been vigorously engaged in corporate governance issues for more than 20 years and executive compensation remains a centerpiece of that effort.
Read CalSTRS news releases discussing executive compensation.
Corporate accountability has become a high-profile issue and today's economic challenges are forcing a reconsideration of the role of boards of directors in the long-term growth of publicly held companies.
The economic downturn has highlighted the impact that board diversity plays in providing companies with a full range of talent and experience. CalSTRS firmly believes diversity should be considered by corporate boards and their nominating committees in the overall context of improving shareholder value.
Read CalSTRS news releases discussing board diversity.
CalSTRS seeks to improve the transparency and disclosure of environmental risk data by corporations. We will continue to be
members of coalitions on issues such as greenhouse gas emissions and water management.
Read CalSTRS news releases discussing sustainability risk management.
For more information on corporate governance, see the resources page.
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