US - The California Public Employees' Retirement System has announced plans to ask 58 of the top US firms in its global equity portfolio to adopt the majority vote standard in uncontested elections for corporate directors.
The US$205bn pension fund warns that if the companies fail to act, they could face a shareholder resolution.
Under the plurality vote standard, shareowners can oppose candidates by casting "withhold" votes.
But for uncontested seats, they have no voice in the outcome as candidates need to receive only a single "for" vote.
The CalPERS board believes a majority vote policy is critical for improved accountability and to encourage better shareowner-director communication.
"Many companies have already adopted this rule on their own, and we hope that others will do so in the coming weeks," said CalPERS board president Rob Feckner.
The investment committee will also push for the policy to include the required resignation for any director that receives a withhold vote greater than 50% of the votes cast.
Separately, the CalPERS board said it would work closely with Democrat senators on the passage of sweeping new financial reform laws that would give the US Federal Reserve greater regulatory powers over US banks.
The banking regulation bill was unveiled by senator Chris Dodd, the chairman of the Senate Banking Committee, on Monday.
George Diehr, chair of the investment Committee, said: "CalPERS investment portfolio was harmed by the economic fallout in the marketplace and lack of strong corporate governance and market regulation."
He added: "Finally, we have a common sense approach that everyone can support."
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