Westly voiced concerns about the voting policies of the California Public Employees Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) in a letter to board members of the two funds. In the letters, Westly questioned whether the two-year proxy voting policy might not be achieving its stated goals of improving auditor independence.
“It’s time to ask: are our policies working? Are companies changing their practices? If they are, we need to press forward. If the answer is no, let’s find out why,” Westly said in the letters.
Specifically, Westly wondered if the two pension funds are in fact withholding votes for board members that represent the values CalPERS and CalSTRS wants from their investments. “I’m concerned that we are voting against some of the nation’s strongest voices for good corporate governance, including Warren Buffett. These are the very people we should be encouraging to serve on corporate boards,” Westly added.
A change in policy would cut a wide swath for the two funds. In the letter, Westly said CalPERS expects to withhold 90% of its votes for corporate audit committee members based on conflicts caused by auditors doing non-audit work, while CalSTRS expects to withhold more than 40%.