California pension giants rack up success in board diversity campaign in home state companies

Leading investors report successful engagement

California pension giants CalPERS and CalSTRS have racked up success in a new campaign to encourage board diversity at companies in their own ‘backyard’.
The pair’s joint campaign has led to 15 companies in the state adding at least one woman to their boards of directors.
The California State Teachers’ Retirement System and the California Public Employees’ Retirement System had written to 131 California companies. “In just four months, 35 companies have responded to the letter and 15 companies have added at least one woman to their boards of directors,” they said in a joint statement.
“We are pleased that a number of companies we contacted recognized board diversity as an important governance practice. In fact, [cloud IT firm] ServiceNow added two women to their board this July,” said CalSTRS Director of Corporate Governance Anne Sheehan.
Her peer at CalPERS, Anne Simpson, added: “As the nation’s two largest funds, it’s great to have our home state set an example for others to follow.” It was proof that “appropriate, constructive engagement” can influence positive results.
CalSTRS Portfolio Manager Janice Hester-Amey, who leads the fund’s board diversity outreach efforts, noted that, as long-term investors, board diversity is seen as astrategic practice for long-term sustainable value: “We’ve worked with many national and global companies on this issue and decided it was time to look in our own backyard.”

“It’s great to have our home state set an example for others to follow”

Meanwhile, Eva Halvarsson, Chief Executive of Swedish buffer fund AP2, says her scheme is vigorously campaigning to raise the percentage of female executives and board members at listed Swedish companies.

In a review of the first half of 2014, Halvarsson noted that while it was positive that 24.7% of board members and 18.4% of executives at the firms were now women, companies needed to do more.

“In this context, we have conducted dialogues with a number of nomination committees in the first half and took up the issue at several annual general meetings (AGMs),” she said. “One of the items we have highlighted is the requirement in the Swedish Corporate Governance Code that nomination committees shall state how gender equality is to be attained over time.” Halvarsson did not, however, name the companies AP2 engaged with regarding the issue.