US - The California Public Employees' Retirement System (CalPERS) has welcomed plans by Massey Energy to upgrade its corporate governance practices.
The company made the improvements following discussions with CalPERS and public pension funds from states including North Carolina, New York and Connecticut after an April explosion at one of its West Virginia coal mines killed 29 miners.
The changes Massey announced include: creating a safety committee consisting entirely of independent directors; allowing majority voting in non-contested director elections; amending the corporate governance guidelines to clarify the responsibilities of the lead independent director and prohibiting a Massey director who is a CEO of a public company from being on the boards of more than two public companies.
The Massey board also said it would hold a vote on a proposal allowing shareowners to call a special meeting. The proposal must be approved by at least 80% of the shares outstanding to take effect.
In May, Massey said it would require all board members to stand for re-election each year.
"In the wake of the tragedy, shareholders have been keenly focused on the board's accountability to its owners, so moves to introduce annual voting for directors and strengthen the board's oversight of management are vitally important," said Anne Simpson, CalPERS senior portfolio manager for corporate governance.
"We will be calling for shareholders to approve the reforms at the special meeting in October, and continuing to engage with the board."
The California State Teachers' Retirement System announced in June it had teamed up with Amalgamated Bank and the Manville Trust to sue officers and directors at Massey Energy for alleged safety misconduct (Global Pensions: 10 June 2010).
The $138bn pension scheme, filed the suit to "hold the individual defendants accountable for their misconduct and thereby prevent future disasters".
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