CalPERS Board Backs Labor Official Harrigan for President

February 20, 2003 ( - The California Public Employees' Retirement System (CalPERS) board has given the nod to union official Sean Harrigan as its first new president in 11 years.

The board of the $133-billion CalPERS voted to tap Harrigan over candidates San Francisco Mayor Willie Brown Jr., and Acting Board President Robert Carlson for a one-year term. The vote tally was 8-4.    The new board head replaces William Dale Crist who stepped down January 15 after 11 years as president (See   CalPERS Poised to Tap New Board Head).  

Harrigan was appointed to the 13-member CalPERS board in 1999 by the California State Personnel Board on which he serves.  He has more than 30 years experience in the food industry, including working for Safeway Supermarkets in various capacities. In 1993, he became assistant to the director of organizing at the Food and Commercial Workers International Union in Washington, DC.

The giant fund has suffered from a series of high-profile turnovers including a chief executive officer, a deputy executive officer, and a general counsel (see    Seismic Shifts Ahead for CalPERS? ). CalPERS “is not just an organization in transition,” the pension fund’s new CEO, Fred Buenrostro, Jr., told a group of business people at a meeting in New York in October. “Almost everybody’s gone.”

CalPERS Often Ahead of Pension-Investing Trends

CalPERS, the nation’s largest public fund with 1.3 million state and local government members, is closely watched as a bellwether for pension-related trends because of its size and influence. Because of that, CalPERS’ top post, which offers little formal power, still holds considerable clout in corporate boardrooms.

CalPERS has been extremely active in recent years in using its size and influence to press major US corporations for change. Last year CalPERS also began to consider civil liberties, press freedoms and political risk in making investments after board members argued that investing in more stable countries with more liberal practices would yield better long-term results. The countries that were dropped scored lower than the threshold imposed by CalPERS, which was based on studies by an outside consultant. (See New Emerging Market Standard Emerges at CalPERS ).

Board members recently backed a proposal by activist California state treasurer Phil Angelides that would ban equity investments in 12 countries from Colombia to China.  CalPERS had been expected to put Thailand and Malaysia back on its list of green-lighted emerging markets, but voted instead to tighten its standards even further than its staff had recommended. Under the revised standards, investment would be cleared for 14 emerging markets, including South Korea, Poland and Israel. 

In another twist, the fund, which has a $1.8-billion position in emerging markets, said it would keep the Philippines on its target investment list for now (See    Philippines Could be Off CalPERS List Again  ). Officials said they would do a further review after officials from that nation appealed the staff recommendation that it be dropped.