Regular readers know that I am a frequent critic of CalPers' approach to corporate governance (see, e.g., my TCS column Directors Cut?). So I applaud the WSJ ($) for jumping in with a scathing critique of CalPers:
[CalPers] declared last month that it will withhold support for the re-election of certain directors at no fewer than 2,700 companies, or 90% of its U.S. investments. It's hard to find a company that Calpers isn't upset with -- from Coca-Cola to Sprint to Citigroup. The ostensible reason is a campaign against "conflicts of interest" regarding directors and auditors. This certainly sounds virtuous, and rooting out genuine conflicts is a good thing.
My TCS column pointed out that CalPers is taking this campaign to an absurd length, a point the Journal alsmo makes. Yet, the Journal goes on to emphasize the much more serious conflicts of interest on CalPers board:
More troubling still is the Calpers jihad against Safeway, which last week bounced three of its board members in response. Ostensibly Calpers is upset about underperformance, but the real problem seems to be the tough stance the grocery chain took against labor during a recent strike.
Eleven of the 13 Calpers board members are either union members, union officials or politicians who take union money. And last year amid the strike, Calpers board member Rob Feckner blasted Safeway (in a letter written on Calpers stationery) for its "blatant disregard for quality of life issues for your long term employees." Mr. Feckner sits on the board of California's school employees' union.
As long as we're talking about "conflicts," let's not forget that Calpers Chairman Sean Harrigan is also the executive director of the union that battled Safeway, the United Food and Commercial Workers. Mr. Harrigan was involved in union rallies against Safeway even as Calpers attacked the company's board.
Those who like classical references will want to ask "Quis cusotdiet ipsos custodes?" Those who lean towards Biblical references will invoke Matthew 7:3-5. I am indifferent as between the two, so long as we all recognize the gross hypocrisy in what CalPers is doing.
