WEST SACRAMENTO, Calif. – The California State Teachers’ Retirement System’s (CalSTRS) Investment Committee has updated their Corporate Governance Principles to expand the definition of board diversity to include sexual orientation and gender identity.
The CalSTRS Corporate Governance Principles outline the basis for how the fund implements governance initiatives with its portfolio companies. Today’s action aligns CalSTRS principles with the request of one of its board members, California State Treasurer John Chiang.
In a February 19 letter to the leadership of the CalSTRS and CalPERS boards, Mr. Chiang called for greater efforts at corporate board diversity, including the expansion of the definition of diversity to include sexual orientation and gender identity.
“The ‘Mad Men-era’ of corporate leadership – which undervalued the role and contributions of women, LGBTs and persons of color – is coming to a close. Today, there is growing agreement that a diverse corporate board is vital for business,” Mr. Chiang said. “Boards with directors who possess a wide range of skills and experiences are better positioned to oversee company strategy, risk mitigation, and management performance. Companies wishing to remain competitive in the new global economy will benefit from drawing on diverse experiences and perspectives that reflect a changing customer base.”
“Today’s action enhances an approach CalSTRS has recognized for some time that diversity adds value to board performance by injecting the multiplicity of views that accompany gender, ethnicity, experience and educational differences. That effectiveness is strengthened by including sexual orientation and gender identity and we commend Treasurer Chiang for advocating it,” said CalSTRS Chief Executive Officer Jack Ehnes. “We understand all too well the value of diversity on the performance of our portfolio companies, which comprise our $111.2 billion global equity portfolio. Their success is a linchpin to our ability to secure the financial future of California’s educators.”
