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SACRAMENTO – State Controller John Chiang today asked the nation’s first and second largest public pension funds to lead an effort to increase women and minority representation on corporate boards.

"Across the nation, the faces of companies' shareholders are rapidly changing, and in order to tap into a wider range of talents and ideas, corporate boardrooms should reflect this changing diversity," Chiang said. "I am asking that CalPERS and CalSTRS leverage their leadership in corporate governance and diversity initiatives to help women and minorities increase their representation on corporate boards."

In letters to the CalPERS and CalSTRS Investment Committees, Chiang wrote women and minorities continue to be underrepresented on corporate boards nationwide, despite widespread acknowledgement that diversity strengthens a healthy corporate structure. Chiang cited a 2005 report from the Alliance for Board Diversity that found women and minorities hold fewer seats on the boards of Fortune 100 companies when compared to general population demographics for race and gender.

Institutional investors have acknowledged that diverse corporate boards are necessary to properly represent shareholders and maintain a competitive edge in global markets. The CalPERS Core Principles of Accountable Corporate Governance recommend that corporate boards consider a mix of director characteristics and diverse perspectives when nominating directors, and also suggest that boards should include members from historically underrepresented groups.

"Diversity in the boardroom leads to greater creativity, dynamic debates, and more integrity of processes – all of which are strong traits for a board and good corporate governance practices," Chiang added.

Chiang is recommending that the pension funds study the most recent available data on board diversity and consider amending its corporate governance policy to address diversity when the funds nominate directors, establishing best practices for corporations to follow in seeking diversity, and actively engaging companies on the issue of diversity, including filing shareowner proposals that address diversity when appropriate.

As California's Controller, Chiang is a board member of both CalPERS and CalSTRS, the nation's two largest public pension funds with more than $413 billion in combined assets.

Larry Jones, head of the emerging manager program at Northern Trust Global Advisors, has left the firm. NTGA spokesman John O’Connell confirmed the departure but declined to comment on whether Jones left the firm or was let go. Jones, reached at home, told EMM “Northern Trust and I are separated and the terms of our separation are being negotiated.” He declined to comment further until the negotiations are completed.

Robert Furnari, managing director of the emerging/minority manager program and chair of the firm’s Emerging and Minority Oversight Committee, has taken over Jones' role on a permanent basis, according to O’Connell. John McCareins, v.p. and program manager, has also assumed an expanded role in the program that includes day-to-day responsibility for program management and client relationships. He will be assisted by senior manager research professionals Luis Diez and Eric Hsueh, who will assume increased responsibility for emerging manager due diligence and monitoring.

Furnari has been with Northern Trust since 1985 in various roles. McCareins joined NTGA in February 2006 to assist with portfolio construction and manager research. He was previously a v.p. at T. Rowe Price.

The firm began contacting clients last week to inform them of Jones’ departure and is in the process of contacting managers.

Jones joined NTGA in September 2005 from NCM Capital Management, a minority-owned investment management firm, where he oversaw $2.5 billion in assets as managing director for equity securities. He has also served as president, market strategist and director of research for The Kenwood Group, a minority-owned Chicago-based investment firm. He was also previously cio at W.R. Lazard.

Jones was hired to replace Clayton Jue, who left NTGA to form manager-of-managers Leading Edge Investment Advisors.

While the firm has had some success under Jones, winning mandates from the Maryland State Retirement & Pension System, the Oregon State Investment Council and being selected for the California Public Employees Retirement System’s spring-fed pool, there have also been some noticeable misses.

The firm was passed over by the New York City Retirement Systems, which hired five competitors to oversee its $1.4 billion emerging manager program. The firm was also recently terminated by long-time client The State Universities Retirement System of Illinois, which opted to remain with its other incumbent Progress Investment Management Company in a move to consolidate its manager-of-managers portfolio. NTGA was also not one of the initial four managers-of-managers to be selected for the California State Teachers Retirement System’s developing manager program, though it was added to a pool of manager-of-managers for potential future investments.

"Northern has been committed to the E/M business since its inception in 1993. Today we have over $3.7 billion in 15 mandates for 13 clients and over $5.7 billion in assets invested with E/M managers. We continue to expand our research on the benefits of using emerging managers, and to add new mandates such as multi-strategy core-plus fixed-income, international equity and best in class. The E/M team continues to be supported by our robust manager research, risk management, compliance, operations and client servicing teams," O'Connell said.