RI Briefing: January 26: CalSTRS backs new directors at Charles River

RI’s regular Wednesday round-up of resposible investing news

CalSTRS, the $146.4bn (€106.9bn) California State Teachers’ Retirement System, has endorsed the appointment of Robert Bertolini and Richard Wallman to the board of medical research firm Charles River Laboratories International. CalSTRS and asset manager Relational Investors – which own a combined 6% of the firm – say the appointments are “first step toward the company’s re-establishing credibility with its shareholders”. Link
The European Commission has extended the deadline for responses to its consultation on non-financial reporting. Respondents now have until the close of business on Friday January 28 to make their comments. Link

The Securities and Exchange Commission, the US regulator, has adopted new rules under the Dodd-Frank act giving shareholders a vote on executive compensation. Now say-on-pay votes must occur at least once every three years – beginning with the first annual shareholders’ meeting taking place on or after January 21 2011. Firms also have to hold a “frequency” vote at least once every six years. Announcement

The first say-on-pay vote – at Monsanto on January 25 – saw almost a third of votes cast against management. The company said it would implement an annual advisory vote on executive compensation, in line with a non-binding shareholder vote. Link

The Swiss pension fund-backed Ethos Foundation has found that 33 of the 100 largest Swiss listed companies will implement an advisory vote of the remuneration report or system at their 2011 annual general meeting – against just 20 in 2010. The average participation rate at Swiss AGMs is 55%, which Ethos says shows that shareholders aren’t taking their duty to defend their long term interests seriously enough. Link

The Belgian Corporate Governance Committee has recommended that the boards of listed companies should be comprised of at least 30% women within seven years. The move comes as Parliament debates whether to legislate for quotas for female representation on boards. Link (French)*Proxy voting and research* firm PIRC has found that most respondents to the UK’s Stewardship Code continue to keep voting records private. Just under half the asset managers making a statement on compliance with the Code do not make any voting data public, PIRC found.

The S&P/Hawkamah Pan Arab ESG index is set to be launched in Dubai next week. The tradeable index comprises listed companies based on their liquidity and environmental, social and governance reporting practices. Link

A new academic study has found that US institutional investors vote against management recommendations for non-US firms. The research Shareholder Voting and Corporate Governance Around the World was put together by Peter Iliev, Karl Lins, Darius Miller and Lukas Roth.

There has been an “astounding” response to the latest survey of sustainability reporters and readers. Reporting Change surveyed more than 5,000 Reporters and Readers and was conducted by KPMG, SustainAbility and Futerra for Global Reporting Initiative.

Consulting firm Arthur D. Little has published a guide to sustainability for board members. The Board’s Sustainability Handbook “sets out the key ideas for non-specialist senior executives in an easily digestible format”. Link

The pay of chief executives at large US companies is closely aligned with performance, according to consulting firm Pay Governance. The firm reviewed SEC proxy filings and found that executive payouts under both annual and long-term incentive plans are closely linked to total shareholder return and earnings per share growth.

CA Technologies (the former Computer Associates) has become the first software firm to join the Ceres network. CA, which provides an energy, carbon and sustainability management solution called CA ecoSoftware, recently announcing that its Corporate Governance Committee will formally provide sustainability oversight at the board level. Link