GLOBAL - Many pension funds are "paying lip service" to corporate governance, Virginia Retirement System chair Alfonso Samper told the World Cup of Investment Management conference in Barcelona this week.
Samper, whose own pension fund board takes an active role in corporate governance, said while the concept was important, excessive activism was not in the best interest of beneficiaries.
He referred to the New York City retirement funds, which regularly issue shareholder proposals requesting companies implement guidelines on human rights and environmental issues, and the California Public Employees Retirement System (CalPERS), whose former president Sean Harrigan – a vocal corporate governance campaigner – was ousted from the board.
“Frankly I don’t think that level of activism is appropriate when you have a diverse constituency,” he said. “These issues should concern all of us, but from the point of view of someone with responsibility for US$42bn and 300,000 retirees… as a public plan sponsor, what is and what is not in the best interests of plan participants?
“When you represent different creeds, different races, different genders, what is the proper course [of action] to undertake?”
Samper argued the need for stronger accounting standards and regulatory standards with “teeth” behind them. He dismissed the frenzy over corporate governance as “a passing thing” spurred on by past scandals that have plagued the US corporate world.
“I see a lot of paying lip service to this issue of corporate governance,” he said. “If Enron and Worldcom had not happened, you would not see the level of interest in corporate governance you see today.”
He added “all the corporate governance due diligence in the world” would not have prevented the “problems” of the past.
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