Steve Greenhut details the all-so-important goal of the two major California pension funds — skin color diversity on corporate boards:
The nation’s two largest pension funds, the California Public Employees’ Retirement System and the California State Teachers’ Retirement System, have been plagued by myriad fiscal problems and even a corruption scandal in the case of CalPERS, and yet these systems continue to lecture the private sector on ethical corporate governance. The latest nonsense, released recently, is a project funded by the two systems to promote “diversity” in board rooms.
The two funds launched something called the Diverse Director DataSource (3D), which is designed to help companies find “untapped talent to serve on corporate boards,” according to a statement from the pension funds. It’s meant to be voluntary, but make no mistake about the political and investment muscle these two funds wield. As the Wall Street Journal reported, many Wall Street sources believe this really is a mechanism by which the investment funds can select board members and exert more political control over corporations.
Yes, I’m sure they don’t have anything more important to do. Let’s ignore that the “diverse” governance of Fannie Mae and Freddie Mac didn’t turn out so well. You stick a bunch of people together with the “right degrees” (aka in nothing useful) from the “right schools”, and there is precious little diversity — doesn’t matter what SPF they need in their sunscreen.
Anyway, what’s good for the goose and all that, right? How “diverse” are the Calpers and Calstrs boards?
CalPERS lists 13 board members (including ex-officio members). I count 10 older white guys, one older black guy, a woman and the elected state controller, John Chiang, who is of Chinese descent. More significant, every one of these board members is a public employee, a retired public employee, a “private” contractor who works for public employees or an elected official.
The CalSTRS board is dominated by white women and, for obvious reasons, all members are public employees. These are two of the least-diverse groups imaginable.
Officials from the board reminded me that these government boards’ make up is determined by statute. But so what? They shouldn’t be lecturing others or trying to hand-pick directors for companies.
Mmmhmmm. I think you need to look to your own house first, Calpers and Calstrs. I would recommend looking for people who understand how to manage tough cashflow situations, and who will stay out of investment boondoggles.
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