CalPERS practices what it preaches: applying corporate governance to itself.SACRAMENTO, Calif.--(BUSINESS WIRE)--Oct. 26, 1995--The California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Public Employees' Retirement System (CalPERS), which has successfully prodded self-examinations in the board rooms of America to improve performance, has proven it practices what it preaches. By unanimous vote, CalPERS' 13-member board of administration has voted to adopt a published set of governance Governance makes decisions that define expectations, grant power, or verify performance. It consists either of a separate process or of a specific part of management or leadership processes. Sometimes people set up a government to administer these processes and systems. principles with the same aim of those it watches: to maximize performance and ensure effectiveness in administering and managing the nation's largest public pension fund. The eight-page Statement of Governance Principles completes a process the board began over a year ago -- critically examining its governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. practices to ensure the board is performing at its optimum in overseeing a pension fund with assets currently exceeding $91 billion. The document reinforces the board's authority as the fiduciary fiduciary (fĭd  `shēĕ'rē), in law, a person who is obliged to discharge faithfully a responsibility of trust toward another. .
A fiduciary is the legal term for persons to whom property or power is
entrusted for the benefit of another.) The document for clarifies roles
of the board, its relationship to the day-to-day operations of the
system, outlines individual board member responsibilities and
authorities of the chief executive officer. It clarifies its role in
the selection and evaluation of management and how it will review and
evaluate operations. It outlines the board president's authority,
and as well as authorities of the vice president, committee chairs and
vice chairs.
"These are principles that we have long felt were necessary for private corporations and which have proven to help their bottom line," said Dr. William D. Crist, board president. "Even though we don't have shareholders, we do have over 1 million beneficiaries of our system who expect us to perform at no less a standard," he said. The principles also will address those who ask whether CalPERS has undergone such an effort. "It will help answer those who say, `if CalPERS is watching us, who is watching CalPERS?'" he said. "Now we point with pride to the fact that we hold ourselves accountable in the same fashion that we recommend for all corporate boards." At the heart of the board's statement is the way in which it desires to conduct its business. The statement calls for board members to "meet high ethical standards that exceed legal minimums" and emphasizes "ethical conduct of board business to avoid even the appearance of impropriety Appearance of impropriety is a term often used in reference to a situation whose ethics is deemed questionable. It means that any layperson, without knowledge of the facts, would assume that something he/she saw or heard was inappropriate or a violation of a rule/regulation. . "We believed so strongly in the concept, we wanted to conduct such an examination ourselves," he said. "The result is not a flowery flow·er·y adj. flow·er·i·er, flow·er·i·est 1. Of, relating to, or suggestive of flowers: a flowery perfume. 2. Abounding in or covered with flowers. 3. recitation rec·i·ta·tion n. 1. a. The act of reciting memorized materials in a public performance. b. The material so presented. 2. a. Oral delivery of prepared lessons by a pupil. b. of policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental , but a concrete set of standards every member of our board has agreed to as it relates to our performance as fiduciaries. We intend to communicate it to our members, and we expect to be held accountable for these principles. CalPERS is an open book; these are its pages," he said. James E. Burton, chief executive officer, applauded the board's action. "It provides clear direction for our organization's standard of conduct, ethics ethics, in philosophy, the study and evaluation of human conduct in the light of moral principles. Moral principles may be viewed either as the standard of conduct that individuals have constructed for themselves or as the body of obligations and duties that a and performance. I hope it can be a model for not only private corporations, but also public boards and commissions to assist with examining their governance policies. I believe it is a proven method for effective governance." CalPERS is the nation's largest public pension fund, providing retirement coverage to over 1 million current and retired public employees. It is the third largest public pension fund in the world. -0- Note to Editors: A copy of the full Statement of Principles can be obtained by contacting the Office of Public Affairs Those public information, command information, and community relations activities directed toward both the external and internal publics with interest in the Department of Defense. Also called PA. See also command information; community relations; public information. , 400 P St., Sacramento, CA 95814 or by calling 916/326-3164. CONTACT: California Public Employees' Retirement System Pat Macht, 916/326-3850 |
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