CalPERS Staff evaluated and rejected California Treasurer John Chiang's request to revise its definition of board diversity to a quota-based standard encompassing at least 30% women and 30% diversity in sexual orientation and cultural and ethnic composition (reported on here) in favor of retaining its current more comprehensive and flexible standard (See B.9 on page 16 of its current Governance & Sustainability Principles).
In connection with recapping its consideration of Chiang's request, CalPERS summarized its board diversity engagement & voting strategy for the 2018 proxy season, as follows:
CalPERS reportedly (pg. 3) will:
- Vote against any combination of Board Chairs, Nom/Gov Committee members, and long-tenured directors at companies that failed to adequately respond to its diversity engagement, following letters to over 500 US companies
- File majority vote proposals at companies that lack diversity and vote against directors at these companies (i.e., extending beyond targeting companies that failed to adequately respond to its board diversity engagement efforts).
- Engage asset owners and asset managers to explore developing market consensus around strategy to improve corporate diversity, as a component of enhancing board quality that will improve risk and return in its portfolio.