CalSTRS Backs Instituitonal Investor Conduct Code

December 4, 2009 ( - The California State Teachers’ Retirement System (CalSTRS) has backed a new international code of responsibility for institutional investors that calls on institutions to publicly state how they apply its principles.

A CalSTRS news release said it is the first U.S.-based fund to support the code created by the British-based Institutional Shareholders’ Committee (ISC), which identifies best practices for institutional investors that choose to engage with the companies in which they invest. The code also aims to enhance the quality of the dialogue of institutional investors with companies to help improve long-term returns to shareholders, the announcement said.

According to the news release, the code calls on institutions to publicly state how they apply its principles and disclose what steps they will take to verify compliance. Institutional investors that do not wish to engage must declare that the code is not relevant to them and explain why.

“We believe there is a universal standard for good corporate governance,” said Anne Sheehan, CalSTRS director of corporate governance, in the announcement. “It includes transparency and disclosure of activities, and engaging the companies to help maximize their performance – a best practice that we’ve followed for years.”

CalSTRS, with a portfolio valued at $127.5 billion, is the second-largest public pension fund in the United States. It administers retirement, disability and survivor benefits for California’s 833,000 public school educators and their families from the state’s 1,400 school districts, county offices of education, and community college districts, and pays benefits of more than $8 billion annually.

The ISC Code is available here.