CalSTRS Statement on the naming of COO Sheryl Sandberg to the Facebook Board of Directors
WEST SACRAMENTO, CA – CalSTRS calls the naming of Facebook’s Chief Operating Officer Sheryl Sandberg to its board of directors a good first step toward greater corporate leadership diversity. CalSTRS also encourages additional action.
“Board diversity is a principle CalSTRS has always pursued in order to foster the kind of good corporate governance that sustains long-term shareholder value, which our members depend on for their financial wellbeing in retirement,” said CalSTRS Chief Executive Officer Jack Ehnes.”We hope to see more diverse and independent appointments to the board in the months to come.”
Facebook is diverse in its employee ranks and among its nearly 60 percent female user base. However, it came into the public sphere in May with an all-male board of directors that failed to reflect that composition. In February, when Facebook announced its board of directors, CalSTRS sent CEO Mark Zuckerberg a letter calling for more diverse leadership.
“By naming Sheryl to the Facebook board, it’s clear the company received the message loud and clear. We are optimistic Facebook is on its way to further expanding the board while simultaneously creating the diversity and independence we think is important to the future sustainability of this vibrant company,” Ehnes said. “It’s promising news, and I’m proud CalSTRS played a role in fostering this very positive change, but we’re not there yet.”
Additional changes CalSTRS wants to see Facebook phase in as it matures in the public markets include:
- Continue diversifying the board toward greater independence and representation of the Company’s user base.
- Equalize the voting power of shares to be representative of economic interest.
- Separate the roles of chief executive officer and chairman of the board of directors.
Along with its more than two decades of advocacy for greater corporate board diversity, CalSTRS along with CalPERS, have pioneered a diversity strategy that incorporates the use of the Diverse Director DataSource, or 3D. It is a resource corporate leaders, like those at Facebook, can use to find qualified, independent and diverse board candidates.
As of June 22, 2012, CalSTRS owns 1,159,291 shares of Facebook valued at $37,166,869 via its Russell 3000 passive index. CalSTRS also owns company shares in private equity fund holdings and through external investment managers.
The California State Teachers’ Retirement System, with a portfolio valued at $146.8 billion as of May 31, 2012, is the largest teacher pension fund and second largest public pension fund in the United States. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and defined contribution plans, as well as disability and survivor benefits. CalSTRS serves California’s 856,000 public school educators and their families from the state’s 1,600 school districts, county offices of education and community college districts.