CalPERS to Adopt PCAOB Audit Independence Proposal

The CalPERS Board adopted a three-pronged plan to advocate majority vote election procedures for corporate directors. Currently, a plurality vote system is used in most corporate elections, in which directors can be elected by the vote of a single share unless they are opposed by a dissident candidate.

"Majority vote will give shareowners the power to hold directors accountable for their actions and their performance, and elect the best person for the job," said Rob Feckner, CalPERS Board President.

Under the plan, CalPERS will:

  • Seek to implement majority vote policies at individual companies through company bylaw and charter amendments;
  • Pursue changes to state laws to implement majority vote where feasible;
  • Seek to implement the majority vote concept at the Securities and Exchange Commission and major stock exchanges; and
  • Amend CalPERS Corporate Governance Core Principles and Guidelines to advocate majority votes for corporate directors.

In a related action, CalPERS Board also adopted a staff recommendation to use the recently released Public Company Accounting Oversight Board (PCAOB) auditor independence proposals as a guideline for the pension fund's proxy votes this season. The PCAOB, which oversees the accounting profession, proposed to bar auditors from advising clients about tax shelters and other money-saving measures.

CalPERS will withhold proxy votes from auditors who violate the proposed standards in the System's U.S. equity holdings that are part of an internal Wilshire 2500 Index Fund. The Board also gave its investment staff the power to vote against individual corporate audit committee members where there are signs of egregious behavior.

You may like these other stories...

A proposal by the Public Company Accounting Oversight Board (PCAOB) to enhance the auditor’s reporting model will be the focus of a public meeting the US regulator will host on April 2 and 3 in Washington, DC.The...
Businesses, organizations, and individuals now have a little extra time to provide comments to the Public Company Accounting Oversight Board (PCAOB) on its reproposed standard that would require public accounting firms to...
By Jason Bramwell, Staff Writer A report released by the Public Company Accounting Oversight Board (PCAOB) found that audit firms may not be executing engagement quality reviews appropriately under a particular auditing...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.