CalSTRS policy calls for political transparency

US - The California State Teachers' Retirement System (CalSTRS) has adopted a policy which puts pressure on company management teams to disclose their political contributions.

At an investment committee meeting on 3 November, the CalSTRS board approved a policy that calls for directors of companies within the pension fund's portfolio to require management to disclose political expenditure.

The policy was adopted after the state treasurer Bill Lockyer, who holds a seat on the CalSTRS board, asked the investment committee to consider the move in May.

Lockyer said: "This policy will ensure corporations' political contributions serve the interests of companies and shareholders."

CalSTRS investment committee chair Harry Keiley added: "Transparency in this area has been a longstanding concern for CalSTRS and remains a key part of our ongoing efforts to elicit more disclosure and accountability from the boards of our portfolio companies.

"Interest and support for these practices also has been steadily growing. For instance, from 2009 to 2010, shareholder proposals in this area more than doubled to 89. Shareholder support for such proposals has also grown, from about 9% in 2004 to 30% in 2010.

"Given that we're a long-term shareholder, CalSTRS wants to make sure political contributions will not have a deleterious effect on the long-term value of our portfolio companies."

The pension fund's portfolio was valued at $139.2bn at the end of the third quarter of 2011.