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Aeisha Mastagni: CalSTRS Corporate Governance Principles and Activist Stewardship.
Episode 28
Published 5 years, 4 months ago
Description
- Intro of episode.
- (1:18) - Start of interview
- (1:52) - Aeisha's "origin story"
- (2:31) - Her beginnings with Salomon Smith Barney and Morgan Stanley in the "dot com" era.
- (3:40) - Her corporate governance beginnings with CalPERS.
- (6:50) - How pension funds manage their proxy voting and stewardship. At CalSTRS they manage 9,000+ equities. Role of Proxy Advisors: they help triage proxy voting, allowing to focus on the most relevant issues.
- (9:17) - She would like to see more competition in the proxy advisory market (ISS and Glass Lewis). She would like to see as many inputs as possible (most informed decision).
- (10:39) - On growth of corporate governance groups at CalSTRS (~15 people, "we call it our beehive") and CalPERS.
- (11:26) - On structure of corporate governance group at CalSTRS: Sustainable investment and stewardship strategies group ("SISS" team). Out of $285 billion of CalSTRS, the SISS team manages ~$8B in a portfolio of public equities (three basic strategies: 1) Passive around a low carbon index, 2) Activist managers, 3) Sustainability focus managers). They want to expand this strategy to private markets. They also have a team that works on strategic relations teams.
- (14:50) - On her role as a board member of Golden 1 Credit Union.
- (18:09) - History and focus of CalSTRS: $285B of assets under management. ~975,000 beneficiaries.
- (21:21) - Stewardship and engagement tools of CalSTRS, "The tools have grown over the last 15 years": 1) Proxy voting, 2) Private engagements, 3) Shareholder proposals, 4) Collaborative engagements (ie. Climate Action 100+, Human Capital Management Coalition, etc), 5) Public engagements.
- (23:27) - The CalSTRS' "Activist Stewardship" Model. This new form of stewardship is "one more tool in our tool chest"... "to be used in very limited circumstances". One of the first examples: the ExxonMobil campaign (with Engine No.1 and D.E.Shaw Group). "It's not about the size of investment, it's about credibility of the argument"
- (29:02) - The value of engagements. On number of CalSTRS' shareholder proposals (down significantly, from 25-50 per year to 3-4 per year) and private interactions with companies. They have a variety of initiatives:
- Diversity efforts.
- Climate Action.
- Human capital management.
- Pandemic Resilient 50.
- (34:53) - CalSTRS boardroom diversity efforts. The Diverse Director DataSource (3D) (now transitioned to Equilar). Her thoughts on CA's SB-826 and AB-979.
- (37:57) - CalSTRS' ESG Focus. They want to expand the sustainability investment approach to private assets including infrastructure, PE and real estate.
- (41:36) - On CalSTRS' Corporate Governance Principles. "I like to think that at CalSTRS we are progressive in term