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 understand the CalSTRS portfolio is the bedrock of the members' retirement security and that good corporate governance is essential to the safety of the portfolio.

CalSTRS has undertaken a variety of corporate governance initiatives and has sounded its message in political halls, the board rooms and the court rooms.

These actions have included:

• Support of the Sarbannes-Oxley legislation that brings dramatic new standards to the corporate board rooms and accounting profession
• Encouragement of the SEC's efforts to adopt tough regulations to rein in lax business practices
• Discussions with individual corporate leaders to express CalSTRS' interest in good corporate governance practices
• Litigation to pursue both financial remedies for the system as well as governance reforms

In addition, 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.