VERSCHOOR – VIEDERMAN PARTICIPANT’S PROPOSAL SUBMITTED
TO 2003 CREF ANNUAL MEETING
WHEREAS CREF professes to be a leader in corporate governance issues, and whose former Chairman, President, and CEO participated as a member of The Conference Board Commission on Public Trust and Private Enterprise, a ‘Blue Ribbon’ commission designed to restore the confidence and trust of investors, employees, consumers, and the public at large, and
WHEREAS CREF wishes to be considered a “concerned investor,” and believes it should be an active and involved shareholder on behalf of its participants, and has proclaimed policies designed to “encourage improved governance policies and practices [in its portfolio companies], thereby leading to better corporate performance and enhanced accountability,” and
WHEREAS increasing numbers of CREF participants have raised concerns that their organization does not appear to utilize the same good corporate governance principles, recommendations and specific best practice suggestions set forth by The Conference Board Commission’s report (the Report), many of which it already advocates publicly.
RESOLVED that CREF report to its participants by December 2003 its plans to adopt the applicable Conference Board’s recommendations [examples are set forth below] or explain why it is in participants’ best interests not to do so.
PARTICIPANTS’ SUPPORTING STATEMENT
As a group, college faculty and staff, the preponderance of CREF participants, have a keen awareness of the importance of good corporate governance in view of recent business scandals. A subset who are educating tomorrow’s business executives, those participants who are business school faculty and staff, have a personal interest in and concern for the recent decline in confidence in American capital markets.
Recommendations contained in the Report that are particularly applicable to CREF:
WHEREAS CREF wishes to be considered a “concerned investor,” and believes it should be an active and involved shareholder on behalf of its participants, and has proclaimed policies designed to “encourage improved governance policies and practices [in its portfolio companies], thereby leading to better corporate performance and enhanced accountability,” and
WHEREAS increasing numbers of CREF participants have raised concerns that their organization does not appear to utilize the same good corporate governance principles, recommendations and specific best practice suggestions set forth by The Conference Board Commission’s report (the Report), many of which it already advocates publicly.
RESOLVED that CREF report to its participants by December 2003 its plans to adopt the applicable Conference Board’s recommendations [examples are set forth below] or explain why it is in participants’ best interests not to do so.
PARTICIPANTS’ SUPPORTING STATEMENT
As a group, college faculty and staff, the preponderance of CREF participants, have a keen awareness of the importance of good corporate governance in view of recent business scandals. A subset who are educating tomorrow’s business executives, those participants who are business school faculty and staff, have a personal interest in and concern for the recent decline in confidence in American capital markets.
Recommendations contained in the Report that are particularly applicable to CREF:
- Avoid having one individual functioning as Chairman, as President, and as CEO with no other director appointed Lead Independent Director or Presiding Director. This leads to undue concentration of power, unproductive oversight and ineffective governance. (Principle I)
- Expand the mission of the Nominating and Personnel Committee to include evaluating Board performance and adequately planning for CEO succession. The recent requirement to go outside for a new CEO was undoubtedly costly. (Principle IV.)
- Assign Board responsibility for overseeing ethics in the organization to assure the appropriate culture is established and maintained. (Principle VI)
- Encourage participant involvement. (Principle VIII)
- Elect the Board on an annual rather than a staggered basis.
As a professed world leader in corporate governance, CREF should set an example for its portfolio companies by ‘walking the talk’ and actually implementing in its own operations the best governance principles it espouses and which are recommended by the report of the latest Blue Ribbon Commission on governance.
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