The Global Principles of Accountable Corporate Governance ("Global Principles") create the framework by which CalPERS executes its proxy voting responsibilities in addition to providing a foundation for supporting the System's corporate engagement and governance initiatives in international developed and emerging capital markets. CalPERS implements its proxy voting responsibility and corporate governance initiatives in a manner that is consistent with the Global Principles unless such action may result in long-term harm to the company that outweighs all reasonably likely long-term benefit or unless such a vote is contrary to the interests of the beneficiaries of CalPERS system.

The execution of proxies and voting instructions is the primary means by which shareowners can influence a company's operations and corporate governance. It is therefore important for shareowners to exercise their voting rights, making their decisions based on a full understanding of the information and legal documentation presented to them. CalPERS will vote in favor of or "For", an individual or slate of director nominees up for election that the System believes will effectively oversee CalPERS interests as a shareowner consistent with the Global Principles.

However, CalPERS will withhold its vote from or vote "Against" an individual or slate of director nominees at companies that do not effectively oversee CalPERS interests as a shareowner consistent with the Global Principles or in limited circumstances where a company has consistently demonstrated long-term economic underperformance.

At a minimum, CalPERS believes the criteria contained in the Global Principles are important considerations for all companies within the global market, especially those companies in developed markets. However, CalPERS recognizes that the adoption of the Global Principles in its entirety may not be appropriate for every company, especially those companies in emerging capital markets, due to differing developmental stages, ownership structure, competitive environment, or a myriad of other distinctions.

By adopting the Global Principles of Accountable Governance that follow, CalPERS strives to influence the market through advancing the corporate governance dialogue while also providing an educational forum by representing a foundation for accountability between a corporation's management and its owners.