Aeisha Mastagni: CalSTRS Corporate Governance Principles and Activist Stewardship.

Intro of episode.(1:18) - Start of interview(1:52) - Aeisha's "origin story"(2:31) - Her beginnings with  Salomon Smith Barney and Morgan Stanley in the "dot com" era.(3:40) -  Her corporate governance beginnings with CalPERS.(6:50) - How pension funds manage their proxy voting and stewardship. At CalSTRS they manage 9,000+ equities. Role of Proxy Advisors: they help triage proxy voting, allowing to focus on the most relevant issues.(9:17) - She would like to see more competition in the proxy advisory market (ISS and Glass Lewis). She would like to see as many inputs as possible (most informed decision).(10:39) - On growth of corporate governance groups at CalSTRS (~15 people, "we call it our beehive") and CalPERS.(11:26) - On structure of corporate governance group at CalSTRS: Sustainable investment and stewardship  strategies group ("SISS" team). Out of $285 billion of CalSTRS, the SISS team manages ~$8B in a portfolio of public equities (three basic strategies: 1) Passive around a low carbon index, 2) Activist managers, 3) Sustainability focus managers). They want to expand this strategy to private markets. They also have a team that works on strategic relations teams.(14:50) - On her role as a board member of Golden 1 Credit Union.(18:09) - History and focus of CalSTRS: $285B of assets under management. ~975,000 beneficiaries.(21:21) - Stewardship and engagement tools of CalSTRS, "The tools have grown over the last 15 years": 1) Proxy voting, 2) Private engagements, 3) Shareholder proposals, 4) Collaborative engagements (ie. Climate Action 100+, Human Capital Management Coalition, etc), 5) Public engagements.(23:27) - The CalSTRS' "Activist Stewardship" Model. This new form of stewardship is "one more tool in our tool chest"... "to be used in very limited circumstances". One of the first examples: the ExxonMobil campaign (with Engine No.1 and D.E.Shaw Group). "It's not about the size of investment, it's about credibility of the argument"(29:02) - The value of engagements. On number of CalSTRS' shareholder proposals (down significantly, from 25-50 per year to 3-4 per year) and private interactions with companies. They have a variety of initiatives:Diversity efforts.Climate Action.Human capital management.Pandemic Resilient 50.(34:53) - CalSTRS boardroom diversity efforts. The  Diverse Director DataSource (3D) (now transitioned to Equilar). Her thoughts on CA's SB-826 and AB-979.(37:57) - CalSTRS' ESG Focus. They want to expand the sustainability investment approach to private assets including infrastructure, PE and real estate.(41:36) - On CalSTRS' Corporate Governance Principles. "I like to think that at CalSTRS we are progressive in terms of our principles." Independence first and foremost. On Chair/CEO role and overboarding. "There are some issues that we are unwilling to waiver."(48:25) - On corporate purpose.(50:18) - Her favorite books:Freakonomics, by Steven Levitt and Stephen Dubbner (2005)Life in Motion, by Misty Copeland (2014)(51:16) - Her mentors (her father). Professionally:Ted White (former head of corporate governance at CalPERS)Anne Sheehan (former director of corporate governance at CalSTRS)(52:55) - Her favorite quote: "If you can’t explain it to a six-year-old, you probably don’t understand it yourself." (Albert Einstein).(53:48) - Her "unusual habit": anything to do with dance.(46:35) - Her parting thoughts to directors: "Remember who you're representing when you're sitting inside that boardroom. You're there to represent the interest of a broad shareholder group and your responsibility to them is to ensure a risk-adjusted return (considering all long term ESG risks, doing it in a responsible and ethical manner)."Aeisha Mastagni is a Portfolio Manager in the Sustainable Investment & Stewardship Strategies Unit at the California State Teachers’ Retirement System (CalSTRS), the second largest public pension fund in the United States with $285 billion dollars in assets under management. Aeisha also serves as a director of Golden 1 Credit Union, California's leading credit union and one of the largest in the United States with over 1 million members and assets over $16 billion.If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media. __Follow Evan on:Twitter @evanepsteinSubstack https://evanepstein.substack.com/Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License You can follow Evan on social media at:X: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/__To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/__Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License