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Mission
The California Public Employees' Retirement
System (CalPERS) and Hermes Investment Management Limited (Hermes) are
each among the largest institutional investors within their home countries.
Both CalPERS and Hermes have also developed comprehensive programs designed
to enhance the value of their respective investments, by actively but
constructively exercising shareowner rights. Through these programs, CalPERS
and Hermes are recognized as leaders within the corporate governance movement.
To further their global efforts in this area, CalPERS and Hermes have
joined together in a Corporate Governance Strategic Alliance. This mission
of this Alliance is:
To enhance shareowner
value by achieving, within the US and UK markets, greater recognition
of the value of corporate governance.
Structure
The Alliance has three components:
- Endorsement
CalPERS and Hermes each endorse the other's home market proxy voting
policies, and will generally vote their foreign proxies in accord with
these policies.
- Consultation
Where proxy voting policies call for case-by-case analysis, CalPERS
and Hermes pledge to consult with each other, respecting the home market
expertise and credibility that each will bring to these discussions.
Similarly, in those circumstances where CalPERS or Hermes are engaged
in active governance discussions with a company within their home markets,
they will consult with each other to determine whether cooperative action
is appropriate.
- Cooperation
CalPERS and Hermes will work cooperatively in three types of
scenarios:
- Each has determined that the active
and company-specific governance efforts of the other in the other's
home market warrant the support of the Alliance;
- Either has requested representation
at an annual shareholder meeting to be held in the other's home market;
and
- Both have determined that a global
issue exists (e.g., executive remuneration, preemption rights) for
which the development of a shared policy and plan of action will increase
the ability to influence change.
- Expansion
Institutional investors representing the domestic views of other (i.e.,
non-US and non-UK) markets may join this Alliance, with the mutual agreement
of both CalPERS and Hermes.
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