Collective action to spur change
When the Council of Institutional Investors (CII) was created in 1985, with 21 members and no staff, few could imagine the monumental changes in corporate governance that it would see—and help to bring about—before its 20th anniversary.
The Council was founded in an era of corporate takeovers and efforts to thwart them, imperial CEOs and insulated boards of directors. Shareowners had little say in most corporate decisions and did not appreciate the potential power of their proxy votes.
Evolution of the Council
A small group of visionary public pension fund officials realized that companies in which they were investing their members’ retirement assets needed more oversight by shareowners. They also believed that by pooling their resources, institutional investors could use their burgeoning proxy power to hold companies accountable.
Jesse Unruh, the elected state treasurer of California, New York City Comptroller Harrison J. Goldin and State of Wisconsin Investment Board Chair John Konrad were the founding co-chairs of the Council. They were joined by 18 other organizations.
The Council today
From that day forward, the goal of the Council has been constant even as the membership has grown larger and more diverse. Today, members include more than 140 public, union and corporate pension funds with combined assets that exceed $3 trillion.
Members have used their proxy votes, shareholder resolutions, pressure on regulatory bodies, discussions with companies and litigation where necessary to effect change. Many of the Council’s corporate governance policies, once considered radical, are now in the mainstream.
Institutional shareowners have a much greater voice today than they did 20 years ago. And the Council continues to provide the constant vigilance and hard work needed to protect and strengthen that voice.
“The Council of Institutional Investors may prove to be one of the most important developments in investor representations since the inception of the SEC (Securities and Exchange Commission).”
-John S. R. Shad, Chairman, Securities and Exchange Commission, 1988