RI Governance & Engagement, July 21: CalSTRS hails successful proxy season

RI’s regular review of governance and engagement news

The $154.3bn (€108.4bn) California State Teachers’ Retirement System’s (CalSTRS) has hailed a successful engagement effort during the 2011 proxy season. It said it withdrew 21 of 26 proposals calling for majority voting board elections. “Engaging companies to improve director election standards has been particularly successful this year because we’ve shown these improvements set the groundwork for sustained performance,” said CalSTRS Director of Corporate Governance Anne Sheehan.

The Australian Council of Superannuation Investors, which represents the interests of 41 funds with over A$300bn (€226.4bn) in assets, has found a “widening divide” in corporate sustainability disclosure. The findings come in the fourth edition of its Sustainability Reporting Journey, which looks at how ASX200 companies disclose information regarding their environmental, social and governance (ESG) performance. Announcement

NEI Investments, the Canadian asset manager, says a lot of its engagements with companies over linking pay with environmental and social performance have “yielded progress through dialogue” notably at Talisman, Cenovus and Canadian Natural Resources. But dialogue with financial sector companies delivered less progress, so it filed shareholder proposals. “We do not shy away from challenges, as the Ethical Funds Focus List for 2012 will show when it is released in the fall,” NEI said in a round-up of the proxy voting season.

More than a third of votes (33.5%) were cast against the remuneration report at the annual general meeting of electronic interdealer brokerage ICAP Plc on July 13. ICAP’s Investor Relations site

Aviva Investors, the fund management arm of insurance giant Aviva, has said it will again withhold its support for three key resolutions at Indian mining company Vedanta’s annual meeting on July 27. “The company has made some progress, and we welcome that. But while the direction of travel is the right direction, the speed is far too slow,” Steve Waygood, head of sustainability research and engagement at Aviva Investors, told Reuters.
The consultation period for the European Commission’s corporate governance Green Paper ends tomorrow (July 22). The Commission launched the review in the wake of the financial crisis.Investors will be able to source key data to analyse a multinational’s financial health, exposure to individual countries’ problems, and worldwide operations, US Senator Carl Levin said at the introduction of the Stop Tax Haven Abuse Act. If passed, the Act would put new restrictions on the use of offshore tax havens to avoid and evade federal taxes, and require annual country-by-country reporting by SEC-registered corporations related to their employees, sales, purchases, financing arrangements, and taxes.

The Governance & Accountability Institute has been appointed by the Global Reporting Initiative as its sole data partner for the US. Under the arrangement, the institute will monitor and collect corporate sustainability reports. “It’s a natural fit for us to do this in a more structured and organized way,” said Hank Boerner, chairman of the Governance & Accountability Institute.

Pharmaceutical companies are exposed to biodiversity risks, according to a study – Biodiversity and ecosystem services: Risk and opportunity analysis within the pharmaceutical sector – by KPMG and the Natural Value Initiative on behalf of asset manager Robeco. Lara Yacob, Robeco’s Senior Engagement Specialist, said: “Investors are only now starting to take notice of the potential risks of dependency and impact on biodiversity to preserving shareholder value.”

A leading medical figure in the UK has called on local council pension funds to divest their holdings of tobacco firms. Dr Gabriel Scally, a regional director for the National Health Services was quoted by The Guardian saying: “We need to put them out of business, not invest our hard-earned money in them.” It emerged that seven local authorities in the southwest region have over £100m in tobacco firms.

Consulting firm Towers Watson has launched a blog on executive compensation called Executive Pay Matters. Topics covered will range from CEO pay levels and shareholder say-on-pay votes, to incentive plan design and director compensation programs. In addition, the blog will provide results and analyses of Towers Watson’s surveys on executive compensation, and expert commentary on legislative and regulatory developments. Link