CalPERS, CalSTRS Unleash Database to Aid in Corporate Board Searches

(April 6, 2011) — The two largest public pensions in the country — the California State Teachers’ Retirement System (CalSTRS) and the California Public Employees’ Retirement System (CalPERS) — have teamed up to create a database to help corporations find new talent for boards of directors.

The database is the result of both funds long championing improved corporate governance. “We learned during the financial crisis that groupthink on corporate boards contributed to the crisis,” CalPERS spokesperson Wayne Davis told aiCIO. “This is an attempt to help invigorate boards, helping them locate qualified, skilled individuals who can be on boards asking tough questions and raising issues that perhaps sometimes get ignored or are not dealt with because too many directors think alike.” David added that while the directory does not guarantee a slot on a board, the database helps organizations locate qualified candidates from a pool of untapped talent.

“This datasource drives home the point that having good directors on companies is important to every shareowner,” Davis said. “This fits in with our fiduciary responsibility to our members — finding the best risk-adjusted returns we can. So it’s important for us that companies succeed.”

According to a statement released by the two pensions, the program, titled the Diverse Director DataSource, will consist of “a digital resource devoted to finding untapped diverse talent to serve on corporate boards.” To develop the Diverse Director DataSource, the two California funds commissioned The Corporate Library, an independent corporate governance researcher with an existing database of 130,000 public company directors. The newly created Diverse Director DataSource, known as “3D,” will offer shareowners, companies and other organizations a facility from which to recruit individuals whose experience, skills and knowledge qualify them to be a candidate for a director’s seat. “We wanted to get the word out that after more than a year of work, we have a panel of advisors in place and an independent third-party vendor that will own, operate, and maintain the datasource,” Davis said.

CalPERS and CalSTRS, as well as the advisory panel of institutional investors, diversity groups, companies, academics, search firms and labor organizations contributed to the development of the database.