Corporate Governance

 

The Corporate Governance movement grew out of an understanding that the better a corporation is governed, the better chance that shareholders will see a strong return. Following corporate scandals like Enron, WorldCom and Tyco, investors became more active in trying to ensure that the companies in their portfolios meet these higher standards.

Treasurer Moore has initiated strong corporate governance policies for the North Carolina Retirement Systems (NCRS). During his tenure, he created the Investor Protection Principles, which require money managers to consider governance issues in their company evaluations. The NCRS also developed its own proxy voting guidelines to ensure that the more than 3,000 proxies voted each year are voted in line with sound governance principles.

Treasurer Moore is recognized as a national leader on corporate responsibility. He has been an outspoken advocate on such issues as limiting excessive executive compensation, separating the Chair and CEO positions, developing sustainable environmental policies and allowing greater proxy access for shareholders. The NCRS works through shareholder resolutions, dialogue with corporate leaders and collaboration with other institutional investors to create positive change within portfolio companies.

Examples of actions by the NCRS:

  • Withheld votes from five ExxonMobil director nominees following the excessive pay package awarded to former CEO Lee Raymond.  The retirement and pay package was worth nearly $400 million.  These directors served on the compensation committee and failed to rein in this unwarranted and extreme compensation.
  • Voted in favor of shareholder resolutions that would allow shareholders to have an advisory vote on the compensation reports issued by a board’s compensation committee. These policies give shareholders a greater voice in assessing whether an executive’s compensation package is fair.
  • Coordinated with other institutional investors to encourage stronger pay-for-performance measures and better disclosure of compensation philosophy and practices at Morgan Stanley.
  • Filed shareholder resolution to change by-laws at Hewlett Packard to require the company to allow shareholder director nominees to appear on the company’s proxy statement.
  • Original convener of the 2003 Institutional Investor Summit at the United Nations, where investors came together to share information on the financial impacts of climate change. The first Summit brought together over 200 participants representing over $1 trillion in assets. By the second Summit in 2005, those numbers grew to over 400 participants representing over $5 trillion in assets.
  • Filed shareholder resolution to encourage ConocoPhillips to invest in renewable energy research and development and to reduce carbon emissions, which will help the energy company remain sustainable in a new carbon future.
  • Engaged H&R Block on controversial Refund Anticipation Loans, which can cost consumers in excess of 100% interest, and which were damaging the company’s reputation. H&R Block has since adopted new products with lower interest rates.