As an owner of thousands of publicly traded companies around the world, UC Investments has the opportunity and responsibility to advance long-term shareholder value through active ownership.
Our active ownership efforts comprise two prongs: proxy voting and engagement with selected companies on significant issues.
Shareholder voting rights are important to fiduciary responsibility as a means to promote good corporate governance and long-term shareholder value.
We retain a third party proxy advisory and voting service, Institutional Shareholder Services (“ISS”). While we generally vote in accordance with management’s recommendations on routine business matters, UC Investments’ proxy voting guidelines pay particular attention to risks and opportunities associated with material environmental, social and governance risk factors, consistent with our Sustainable Investing Framework and with relevant policy of the UC Board of Regents. The SRI Guidelines, along with customized enhancements, are well aligned with UC Investments’ conviction that sound corporate governance, including governance of material environmental and social issues, is essential to creating long-term value.
Proxy Voting Records
UC Investments votes in thousands of annual general meetings globally. Our proxy voting record is available here.
As a shareholder, we engage directly with companies in order to advance sustainable long-term value. Our shareholder engagement strategy is aligned with – and amplifies -our proxy voting.
Consistent with our Sustainable Investing Framework, UC Investments shareholder engagement efforts focus on environmental, social and governance factors that pose material financial risks. Over the past few years, we have paid particular attention to how corporations are positioning themselves around climate change and how corporate Boards of Directors are taking action to capture the benefits that diversity brings to decision making.
UC Investments is persuaded by the extensive research linking board diversity to long-term financial performance. The benefits of diversity can include: a larger candidate pool from which to pick top talent, better understanding of consumer preferences, a stronger mix of leadership skills, and improved risk management.
As such, in 2017, we joined The 30% Coalition, a collaboration between corporations, investors and advocacy groups, whose mission is to advocate for diversity on corporate boards, promoting women and people of color. In 2018 and 2019, UC Investments engaged in dialogue with California-based companies lacking diversity on their boards. Working in collaboration with two other California public institutional investors, we communicated with dozens of such companies, via letter and telephonic and in person meetings, encouraging them to institutionalize a commitment to diversity in their nominating committee charter and commit to include women and minority candidates in every pool from which board nominees are chosen, a practice commonly referred to as the “Rooney Rule.”
In 2019, UC Investments joined Climate Action 100+, an institutional investor initiative calling on companies to identify and address climate risks to their business.
We augment our shareholder engagement efforts by working in collaboration with other investors through the responsible engagement overlay (“reo”) service. Working through reo, UC Investments is able to leverage our resources and amplify our voice in a constructive in-depth dialogue with investee companies, in order to improve their long-term performance on material environmental, social and governance issues, including climate change, board diversity and executive compensation, we did in 2020 (pdf).
Corporate Governance Memberships and Affiliations
We advance our learning through membership in the Council of Institutional Investors and the Principles for Responsible Investment. We seek to advance best practices in corporate governance through our support of the Japan Stewardship Code and the Investor Stewardship Group’s Framework for US Stewardship and Governance.