CalPERS, the California Public Employees Retirement System, manages over 240 billion dollars in assets. As an example of shared activism, they review all short- and long-term performance figures for each of the firms in which they invest and request changes in the governance structure of those firms, when they feel the firm is not responsive to their concerns.

Question

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Shareholder activism refers to actions by large shareholders, both institutions and individuals, to protect their interests when they feel that managerial actions diverge from shareholder value maximization. Every year CalPERS reviews the performance of the 1,000 firms in which it retains a sizable investment. They review short- and long-term performance of each firm in its portfolio, its governance characteristics, its financial status, and market expectations for the firm. CalPERS then meets with selected companies to better understand their governance and business strategy. If needed, CalPERS requests changes in the governance structure of the firm and works to ensure shareholder rights.

CalPERS, the California Public Employees Retirement System, Manages Over 240