US - CalPERS has urged fellow shareholders to vote for changes to insurance company Hilb Rogal & Hobbs' board structure at its AGM next month.
Dennis Johnson, senior portfolio manager, CalPERS corporate governance, told shareholders: "A classified board structure at Hilb Rogal & Hobbs can lead to an entrenched board that impedes each director's responsibility to be accountable to shareowners."
CalPERS has requested the firm fall in line with the majority of S&P 500 companies which have adopted an annual board election strategy.
It also called for investors to withhold votes for directors T Chandler Jr and W Thomson who served during a period of significant bad performance.
In March, the retirement fund placed the insurer on a watch list for underperformers, citing declining stock value.
According to CalPERS, the company had underperformed its peer index by 16.4% last year and 40.5% over five years.
Johnson continued: "Significant long term stock return underperformance and the existence of egregious corporate governance practices at Hilb Rogal & Hobbs suggest an inappropriate level of board accountability."
CalPERS claimed to hold 150,000 shares in the company
This call comes after the retirement system expanded its corporate governance guidelines to measure companies' commitment to environmental issues and to encourage firms to increase women and minority representation on their boards (see www.globalpensions.com ; 22 April 2008)
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