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The California Public Employees' Retirement System (CalPERS) today praised the U.S. Securities and Exchange Commission (SEC) for its leadership in proposing new rules that will allow shareowners to include their director nominees in a company’s proxy materials under specific circumstances.
"Today's financial crisis has led many investors to question whether boards and directors are being held accountable and we applaud the Commission’s leadership in bringing this forward. If adopted, these rules will go a long way towards restoring investor confidence," said Rob Feckner, President of the CalPERS Board of Administration. "Existing federal rules in this area have unfairly hindered the ability of shareowners to oversee a company's management. Proxy access is a meaningful way to boost accountability and transparency on corporate boards."
The Commission's action today seeks to change the federal rules governing the proxy process for election of directors. Typically, existing directors will nominate a slate of candidates to the corporate board and will communicate this information to shareowners through proxy materials. Shareowners rarely have much input in the selection of these nominees and therefore must wage an expensive "proxy fight" with their own ballots. The Commission's proposed rules would provide shareowners with a meaningful ability to nominate their own director candidates and to communicate these nominations through the company proxy materials. Improving corporate suffrage, a fundamental right of investors, will increase the protections of investors and will increase the accountability of directors to the owners of the company.
"The SEC is doing what’s right to promote director accountability and to protect investors," said George Diehr, Chair of the CalPERS Investment Committee. "We look forward to a deliberative rulemaking process and are confident it will result in a thoughtful rule permitting reasonable, fair shareowner access."
CalPERS owns shares in more than 7,000 publicly traded companies and is the nation's largest public pension fund with approximately $180 billion in assets. It provides retirement benefits to more than 1.6 million State, school, and local public employees, retirees and their families, and health benefits to nearly 1.3 million members. For additional CalPERS proxy votes and corporate governance information, visit www.calpers-governance.org.
