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$169 billion.
Pension funds usually vote in favor of dissident shareholder
resolutions. It is believed that CalPERS action will spur
other large fiduciaries to rethink their policies of spurning
most corporate responsibility resolutions opposed by management.
The policy states that all proxy issues should be supported
unless it is determined that such support "may result
in long-term harm to the company that outweighs all reasonably
likely long-term benefit to the company."
The CalPERS Board "expects those who manage the companies
whose equities securities are held in the Fund’s portfolio
to conduct themselves with propriety and with a view toward
social considerations. A level of performance above minimum
adherence to the law is generally expected. If any improper
practices come into being, the Board expects corporate management
to move decisively to eliminate them and effect adequate controls
to prevent recurrence, " the policy states.
For instance, "if a company operates in a country or
environment where serious human rights violations occur, the
Board expects to see maximum progressive practices toward
elimination of these violations," the policy states,
adding that if there is apparent lack of progress, the matter
will be viewed carefully to determine if a company is "implicitly
acquiescing in other parties’ repressive practices."
CalPERS may then decide to correspond with the company, meet
with company executives, sponsor a shareholder resolution
or, as a last resort, liquidate holdings.
A preliminary analysis by CalPERS staff comparing past and
future voting patterns predicted that the new policy would
result in CalPERS favoring 57% of dissident proposals in 2001,
up from 37% in 2000.
CalPERS new voting guidelines have been posted at www.calpers-governance.org
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