US - The California State Teachers' Retirement System (CalSTRS) has withdrawn all eight of its board diversity shareholder proposals filed during the 2011 proxy season after successfully engaging companies to reconsider their director searches.
The pension fund said issues of board of director leadership and oversight roles have taken on increased significance to long-term investors in recent years, while current economic challenges highlight the importance that board diversity plays in enhancing value and providing companies with talent and experience.
"We've advanced the ball in the name of board diversity and are committed in our conviction that corporate boards and their nominating committees consider diversity in the larger context of improving shareholder value," said CalSTRS director of corporate governance Anne Sheehan.
"One lesson from the financial crisis was the role corporate board group-think played in fostering management short-term priorities that proved detrimental to sustainable value creation. We think improved board diversity will address that problem."
To assist boards in the enhancement of diversity on corporate boards and of shareholder value, CalSTRS and the California Public Employees Retirement System (CalPERS) have launched the Diverse Director DataSource, (3D). It will be run by corporate governance vendor Governance Metrics International and will and begin accepting nominations from board candidates later this month.
The database will offer shareholders, companies and other organisations a means of identifying candidates, CalSTRS said.
The $154.6bn scheme is the largest teacher pension fund in the US and has 852,000 members.
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