Clout, Conflicts and Controversies: Everything about CalPERS is BIG

Community Comments

     It is a strong, perhaps incontrovertible argument, yet one that has fallen largely on deaf ears.  Sure, there have been a few high-profile victories at companies like American Express and Xerox, but mostly there have been defeats, most notably involving Warren Buffet’s re-election to the board of Coca-Cola. 

CalPERS' investor activism dates to the dark days of greenmail, when well-financed would-be takeover artists bought large chunks of          stock and sold them back to worried companies at a hefty premium to market price.

A Buffer for Buffet

Yes, CalPERS lost, Anson concedes. But he says the business press flubbed the story by making it appear that CalPERS was voting against Buffet, a champion of small investors, rather than against the conflict of interest that results when auditors do nonaudit work, which is the situation at Coca-Cola.            

     CalPERS’ difficulty in gaining traction on this issue is reflected in the fact that nearly all other major institutional investors, including those with strong shareholder-advocacy credentials such as TIAA-CREF (the Teachers Insurance and Annuity Association-College Retirement Equities Fund), don’t automatically withhold votes in similar situations.  Hence, a rethinking of this position by the CalPERS board is in the offing.            

     For all that, CalPERS is not dogmatic on every issue involving corporate governance.  Ted White, director of CalPERS’ corporate governance effort, takes a pragmatic approach.  On the question of whether companies should be chartered by the federal government instead of a state, he notes that well over half of America’s publicly held corporations are already incorporated in Delaware.             

     “So there already is a level of consistency in the rules (Delaware’s) by which we play the game.  There are probably a few issues in which a national set of standards would be extremely helpful, particularly in the structure of takeover defenses, the role of shareholders, those types of things,” says White.

• Share
  • Digg This
  • del.icio.us
  • Newsvine
  • Facebook
  • Reddit
  • Furl It
  • !Y My Web
  • Google
• Email
• Print

Recommend This

Community Comments