CalSTRS Seeks Full SEC Decision on Proxy Access
Chairman’s ruling will not serve the interests of shareholders, CalSTRS Chief Executive says.
SACRAMENTO, CA – CalSTRS Chief Executive Jack Ehnes today joined the nation’s top institutional investors calling for the chairman of the Securities and Exchange Commission to delay decisions on proposed rules that could weaken shareholders’ ability to nominate directors for election to corporate boards.The proposed SEC rules, S7-16-07 and S7-17-07, impact the ability of shareholders to nominate directors to corporate boardsusing companies’ proxy materials.
“Shareholders have not forgotten the lessons of the early part of this decade and one of the most important lessons learned is that governance is a significant risk factor when investing in securities,” Ehnes wrote in an Oct. 2, 2007, letter to the commission, referring to recent high-profile corporate scandals. The governance risk factor requires mitigation like all other factors do when investing, he added.
In today’s letter, Ehnes calls on Chairman Christopher Cox to wait until a full commission is seated to consider the rules changes. He also called on Cox to not follow through on recent statements indicating the chairman would make a decision by the end of the year.
Two members on the five-member SEC Board, both Democrats, have effectively left the board, leaving a significant bipartisan gap. Nominations have only now been made for their successors.
“These rules are far too important to good corporate governance and far too sweeping to adopt without the consideration of the full bipartisan commission,” Ehnes said. “That’s why I’m asking Chairman Christopher Cox to postpone a decision until next year when the full commission can fully debate this issue.”
With a $176 billion investment portfolio, the California State Teachers’ Retirement System is the second-largest public pension fund in the United States. It administers retirement, disability and survivor benefits for California’s 795,000 public school educators and their families from the state’s 1,400 school districts, county offices of education and community college districts.