Focus List Program
A small number of companies are selected each year as part of the Focus List Program. The objective is to improve governance practices at these companies, which leads to better stock performance. The program started in 1987 and focused on companies in the United States.
In November 2014, we revised our process for selecting Focus List companies:
- Our engagements will focus on companies where we own a large number of shares.
- We now consider companies across the globe.
Engagement will continue to focus on corporate behavior related to sustainability issues, such as:
- Board quality and diversity - leadership structure, independence, skill-sets, and diversity
- Corporate reporting - transparency of environmental-social-governance (ESG) practices, business strategy, and capital deployment
- Investor rights - voting rights and director terms
- Risk management of environmental and social issues
- Shareholder alignment on executive compensation practices
In September 2014, Wilshire (a consultant to our Board) published an analysis that measured the stock performance of the 188 companies targeted by the Focus List Program from 1999 through the fall of 2013. The report showed companies we engaged performed better. As of June 30, 2014, the performance of the companies we engaged was:
- 15.27 percent above the Russell 1000 Index
- 11.90 percent above their respective Russell 1000 sector indices