CalSTRS Corporate Governance Program Elevated Its Voice on Policy in 2016
2016 annual report highlights success of key initiatives, collaborations and a glimpse into plans for 2017
WEST SACRAMENTO, Calif. – The California State Teachers’ Retirement System today released its . The report highlights the Corporate Governance staff efforts in, among other issues, regulatory activities, proxy voting and portfolio company engagement.
CalSTRS’ priority is to ensure the retirements of California public school educators and their beneficiaries are secure. Using the tenets of good corporate governance, defined in our , to maximize investment returns is one way we dedicate ourselves to our mission. The advances and successes of CalSTRS Corporate Governance program outlined in this report reflect this deep dedication.
“As an asset owner with a large stake in the health of our capital markets, we want our voice heard as policymakers are considering regulatory changes”
CalSTRS Director of Corporate Governance
“One of our major priorities in 2016 was to increase our engagement with various regulatory and industry bodies whose rules and regulations can impact our work. As an asset owner with a large stake in the health of our capital markets, we want our voice heard as policymakers are considering regulatory changes,” said CalSTRS Director of Corporate Governance Anne Sheehan.
Engagement is a fundamental component of CalSTRS Corporate Governance program. Responding to rules and regulations by filing comment letters allows us to engage policymakers proactively and provide them with insight on how a rule or regulation may impact our investments—positively or negatively—and, in turn, our overall assets.
In 2016, CalSTRS sent 15 letters to various regulatory bodies. One letter of particular note was the response to the Securities and Exchange Commission regarding its concept release of Regulation S-K. CalSTRS made its expectations clear that the SEC should continue to prioritize investors’ needs and ensure their needs are met with improved and enhanced sustainability disclosures. It’s very important to note that this was the first time that sustainability disclosure was put forth in a rulemaking regulation.
CalSTRS believes the execution of proxies is an important fundamental shareholder right, and staff always seeks to exercise this right in a manner consistent with the interests of the members, California’s public educators.
In 2016, CalSTRS Corporate Governance staff voted on 51,442 proposals at 4,812 shareholder meetings held by companies in the non-domestic Equity Portfolio, and on 24,818 proposals at 3,006 shareholder meetings held by companies in the domestic Public Equity Portfolio.
CalSTRS recognizes the importance of partnering and working collaboratively with other institutional investors through organizations that promote best governance practices.
“Staff is actively involved in many organizations and associations including the Sustainability Accounting Standards Board, the Council of Institutional Investors, Ceres and the Human Capital Management Coalition. This involvement allows them to be more deeply and broadly engaged with a variety of financial market participants across a larger spectrum of issues than would otherwise be the case,” added Ms. Sheehan.
Corporate governance plans in 2017 are again multipronged—continuing our push for universal cards, majority vote in director elections, improved environmental disclosures, proxy access and greater diversity in the boardroom, executive and company employee pipelines.
The California State Teachers’ Retirement System, with a portfolio valued at $202 billion as of February 28, 2017, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. CalSTRS serves California’s 914,000 public school educators and their families from the state’s 1,700 school districts, county offices of education and community college districts.