McCauley to lead CalSTRS corporate governance program

The California State Teachers' Retirement System on Wednesday announced that Michael P. McCauley, the senior corporate governance officer of a Florida public pension fund billed as the nation's fourth largest, will guide the fund's corporate governance program.

CalSTRS said McCauley, 37, will come on board in the new position of senior portfolio manager on June 1 at an annual salary of $175,000.

Like other large pension funds, CalSTRS has shown increasing interest in requiring publicly traded companies to meet certain standards of conduct on issues ranging from environmental sustainibility to diversity of management and boards to labor practices.

"We are seeking increased diversity on corporate boards and better climate risk reporting by our portfolio companies regarding the reduction of greenhouse gas emissions," added Jack Ehnes, chief executive of CalSTRS.

Institutional investors have generally held that companies tend to be more profitable when they are held to good business practices.

CalSTRS Chief Investment Officer Christopher J. Ailman said McCauley has been "a national leader in improving corporate auditing standards. He will help raise CalSTRS' voice with the Securities and Exchange Commission, the New York Stock Exchange and other crucial policymakers."

For more than 10 years, McCauley has been with the Florida State Board of Administration, where he championed honest financial reporting practices by public companies, independent boards, performance-based executive pay and precise accounting practices.

McCauley also co-chairs the International Corporate Governance Committee for the Council of Institutional Investors, a nonprofit association of public, union and corporate pension funds based in Washington, D.C. The council has spelled out its corporate governance standards on a variety of issues at www.cii.org/policies.

CalSTRS was a founding member of the council in 1985.

"CalSTRS has a strong track record as a leader in corporate governance, and I look forward to joining with their great staff and helping CalSTRS constructively engage with companies to develop and maintain good corporate governance practices," McCauley said.

CalSTRS said McCauley will be a leader in fund efforts to turn around underperforming companies. He will manage a staff of eight that oversees a $3 billion portfolio. CalSTRS nudges the companies in this fund to turn around their corporate governance practices.

CalSTRS oversees a $164 billion overall portfolio, making it the second-largest public pension fund in the United States. It administers retirement, disability and survivor benefits for California's 813,000 public school educators and their families.

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