The Shareholder ForumTM

Electronic Participation in Shareholder Meetings

Forum Home Page [see Broadridge note below]

"E-Meetings" Home Page

"E-Meetings" Program Reference


The article below was published in Agenda, a Financial Times private subscription service for corporate directors, and is presented with permission.

For the CalPERS Committee recommendation reported in the article, including its supporting attachments, see


Agenda, November 15, 2010 article


The week's news from other boardrooms




Article published on November 15, 2010

By Marc Hogan

Calpers is reevaluating how it puts together its annual Focus List as it looks to improve its strategy for company engagement. The proposed changes would limit the list to stocks the $221.5 billion pension fund owns, put a greater emphasis on short-term market returns and downplay corporate governance factors.

The Calpers staff has developed a series of recommendations to be discussed by its investment committee on Nov. 15, according to a meeting agenda posted on Calpers’s website.

These recommendations come after Calpers successfully completed its 2010 Focus List engagements without publicly naming a company, the first time that has happened since the list began in the 1980s.

“This outcome provided some insight to the current methodology and initiated an internal discussion in regard to the framework,” the agenda says. “The financial crisis also illustrated the limits of the current program methodology by not identifying any financial sector companies despite severe losses to the portfolio.”

First and foremost, the staff recommends selecting companies for the Focus List where the fund has a larger ownership position. Specifically, that means changing the screening universe from the Russell 1000 to the fund’s top 500 domestic equity holdings.

Next, Calpers proposes that its selection process for the list “should be more reactive to market developments,” according to the agenda. To that end, the staff suggests adding one-year stock returns. The process already takes into account three- and five-year returns, which will continue to have a greater weighting.

As part of these changes, Calpers further recommends excluding corporate governance factors from its initial screen for the list. Where the current screen combines total stock returns, governance and financial performance, the staff proposes considering financial returns first and governance issues in a secondary analysis. The current approach “tends to diminish the emphasis of underperformance in the selection process and allows ‘check the box’ governance to mask opportunities for improvement,” the agenda says.

Under the proposals, there would also be more attention paid to directors. It’s unclear from the agenda whether board characteristics will fall into this second screening, but the staff recommends “a greater emphasis on board quality, skill sets and diversity.”



|| Copyright ||

An Information Service of Money-Media,
a Financial Times Company




This Forum program is open, free of charge, to anyone concerned with investor interests in the development of standards for conducting shareholder meetings with electronic participation. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The organization of this Forum program was encouraged by Walden Asset Management, and is proceeding with the invited leadership support of Broadridge Financial Solutions, Inc. and Intel Corporation to address issues relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.