As expressed in our Investment Beliefs, we believe long-term value creation requires effective management of three forms of capital: financial, physical, and human. Our Corporate Engagement Program is underpinned by this belief. It's our view that improved alignment of interest between long-term shareowners and companies will enable the Fund to fulfill its fiduciary duty to achieve sustainable risk-adjusted returns.
There are four main drivers in the corporate engagement program:
- Environmental practices, including but not limited to climate change and natural resource availability
- Governance practices, including but not limited to alignment of interests
- Human capital practices, including but not limited to fair labor practices, health and safety, responsible contracting, and diversity
- Risk management practices
Our engagement activity is market wide, which can be considered a strategy for improving the quality of beta in the portfolio. CalPERS also has company specific engagement, which can be viewed as a strategy for addressing alpha-related risk. Compliance is a requirement and mitigates both financial and reputational risks for CalPERS.
Visit the following pages for more information on CalPERS engagement.
The Diverse Director DataSource, known as 3D, offers a new group of candidates which companies and shareowners can select to serve on corporate Boards. This is important since Boards of Directors represent the owners of the companies, which range from individuals to large asset managers. We want to be sure our interests are represented at the highest levels of the company.
Joining & Using the DataSource
Visit Diverse Director DataSource if you want to join 3D as a candidate.
- Potential candidates can complete an online questionnaire and users have access through the site.
- You can self-nominate.
We believe Board Directors should understand accounting or finance, international markets, business or management experience, industry knowledge, customer-based experience or perspective, crisis response, leadership, and strategic planning as well as address historically under-represented groups on the Board, including women and minorities.
We’ve done a lot over the past few years to promote diversity and inclusion:
- Adopted new diversity CalPERS Governance & Sustainability Principles (PDF) to be applied to portfolio companies
- Built an emerging managers and financial services database
- Commented on the SEC proposed rule on Proxy Disclosure and Solicitation Enhancements (PDF) regarding Board nominations
- Identified diverse investment consultants
- Implemented the Diversity Outreach Program
- Responded to the Consultation Paper on Board Diversity (PDF) for the Hong Kong Exchange and Clearing Limited
- Submitted a response to the 2012 ICGN Board Diversity Survey (PDF)
Read the CalPERS Commitment to Diversity & Inclusion (PDF) annual report for more information on our accomplishments.
Update: Financial Market Reform
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