CalPERS proposes changes to approach on engagement

14 November 2010

Sarah Wilson

EU regulation

The California Public Employees’ Retirement System has proposed changes to the strategy used for developing its annual ‘Focus List.” The revised approach would change the targeted companies from the Russell 1000 to CalPERS top 500 domestic equity holdings. In addition, it would provide that governance would become a secondary factor to performance. CalPERS says that its current approach, which combines total stock returns, governance, and financial performance, “tends to diminish the emphasis of underperformance in the selection process and allows “check the box” governance to mask opportunities for improvement.”

The new program requires board approval; once approved, the list will be presented in March 2011 for approval by the Investment Committee.

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