State treasurers favor expensing options

The voluntary guidelines would be drawn up by the six-member
committee of the treasurers association, partly because of the
difficulty of attaining unity on most issues among the 50 U.s.
state treasurers. Treasurers of most states help to oversee the
assets invested in state pension funds.

Vermont Treasurer George “Jeb” Spaulding said he looked
into how investment managers were voting proxies on behalf of one
of the state’s pension funds, and discovered that the managers
were voting the fund’s proxies opposite of one another.

“We apparently have absolutely no policies as the owners
when it comes to our proxies,” Spaulding said. “It’s a
discussion we have to figure out. But as owners of the stock, we
need to be able to have some rational explanation of having our
proxies voted. And we don’t have that right now.”

Brolicki also said the committee’s report will not yet be
endorsed by the entire organization because of “bureaucracy” of
the process, as well as differences over whether states should
lead resolutions on issues such as global warming, as Connecticut
has done under Treasurer Denise Nappier.

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John Serhant, chairman of the investment committee of Boston-
based State Street Global Advisors, which manages about $700
billion, said such issues are more about “social policy” than
corporate governance.

“I am concerned, frankly, that a lot of what is being
suggested as corporate governance is social policy,” Serhant said
during a session on corporate governance moderated by Nappier. “I
am not sure that these social issues are best addressed at the
corporate level.”

Nappier then defended her shareholder resolution on global
warming against American Electric Power Co., the largest U.S.
electricity generator.

“Our reason for filing that resolution is that AEP is the
largest emitter of carbon dioxide in their industry. While some
people may say that’s a social issue, from the perspective of
being a treasurer, it’s a financial issue,” Nappier said. “I’m
not dealing with the science of climate change. I’m dealing with
my investment in that company. We have an interest in the long-
term liability and sustainability of the company.”

Bloomberg News