Since 1986, Jim McRitchie, and later using the internet site PERSWatch.net, has worked together with other CalPERS members to shape CalPERS to be more responsive to the needs of its members. We worked to enact Article 16 of the Constitution, making CalPERS independent from politicians. We insisted that the Board release minutes from closed door investment sessions. How else could we hold them accountable for their votes? We exposed wasteful spending on $750 coat racks for CalPERS cubicles and the common practice of many Board members of accepting gifts of fine dining and entertainment from contractors.
We pointed out that CalPERS kept reducing the State’s contribution (8 times in 11 years) but did little to increase our benefits; in fact they were eroding. Jim McRitchie ran for the Board several times and ran ads in Capitol Weekly reminding the Board that, according to the Constitution, their primary duty is to members, not employers. Toward the end of 1998, we finally got the Board’s attention and they addressed “equity” issues with SB 400, which raised our retirement substantially.
In addition, we worked to reform the election process. Beginning in 2002, CalPERS began holding a runoff vote if no candidate wins a majority. There will be no more directors elected by 5.5% of the vote. That rule was enacted because board members first voted to prohibit ballot statements which include “candidates’ opinion or positions on issues of general concern to the system’s membership.” We fought that move by contacting members, unions and the Sacramento Bee, which ran an editorial CalPERS muzzles critics: Ballot rules protect board, keep others in the dark. Then we won real reforms. We are still working to avoid the $1 million cost of runoffs by getting CalPERS to use an instant runoff (IRV) system for elections.
McRitchie’s work in government, business, non-profits, cooperatives and universities led him to understand that accountability isn’t something easily imposed from the outside; it must be built into the governance structures of our organizations themselves. Not only has he worked to transform the governance structures of CalPERS, he’s also done the same with corporations. (see corpgov.net)
CalPERS has tremendous transformative potential in creating a sustainable economy by seeking triple bottomline returns – excellent financial returns, as well as social and environmental benefits. Research demonstrates that companies with good environmental practices, diverse boards, worker ownership, employee participation in decision-making and democratic corporate governance earn substantially better returns. CalPERS should be encouraging all of the corporations it invests in to have these characteristics and they should use an enhanced indexing strategy to invest more heavily in such companies while reducing investments in companies with poor practices.
By joining our e-mail list we can network with each other and keep pressure on the Board to transform CalPERS from a top down system of governance to a bottom up one, which solicits input from members. Together we can better help our Board protect our benefits.
If you have ideas on what the CalPERS Board should be doing for members and beneficiaries, please call me at 916-869-2402 (evening). My e-mail address is firstname.lastname@example.org. If we can identify just one or two members at each department, board, office, campus, union or association chapter interested enough in the issues to spend just a few minutes each month, we can accomplish a great deal.