CalSTRS Announces ISS Support for Independent Corporate Leadership at Qwest Communications
SACRAMENTO – The California State Teachers’ Retirement System announced today that Institutional Shareholder Services has released a report recommending that its clients vote in favor of the CalSTRS shareholder proposal calling for the separation of the CEO and board chair positions at Qwest Communications International Inc. The vote will be announced at the Qwest annual meeting on May 25, 2004. Last month, another influential proxy advisor, Glass Lewis & Co., also advised its clients to vote for the CalSTRS proposal.
“We are encouraged and pleased that the nation’s leading proxy advisors are speaking out in support of this proposal,” said Jack Ehnes, chief executive officer of CalSTRS. “This bolsters our conviction that shareholders will move to protect their interests and not turn a blind eye to companies that fail to adopt important governance safeguards. Qwest needs to hear and act on this message, and take clear steps to improve its corporate accountability.”
In its report, ISS specifically recognized that representation of the shareholder’s interests should be a primary responsibility of the Board, and that the Board is responsible for both overseeing management and instilling accountability. The report also concurs with CalSTRS’ assertion that conflicts of interest arise when one person holds both the chairman and CEO positions.
With a $116 billion investment portfolio, CalSTRS is the third-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California’s public school teachers from kindergarten through community college, serving more than 735,000 members and their families. CalSTRS currently is involved in litigation against Qwest, certain present and former officers and directors of Qwest, and other unrelated entities, involving claims of fraud, breach of fiduciary duties and violations of state and federal securities statutes. The claims asserted in that litigation do not directly relate to the proposal explained above.