A little more than a month again on these pages we introduced the tale of NYC Comptroller John Liu and his high-profile public campaign against a certain large company recently accused of bribing foreign officials. Since then, at least one other state's retirement plan trustee has jumped on the bandwagon.
This begs the question: Should ERISA trustees do the same? More specifically, when does shareholder activism cross the line and constitute a breach of one's fiduciary duty to act solely for the benefit of the beneficiaries? Without getting into the minutia of ERISA (those interested should check out "Is Proxy Voting a Conflict-of-Interest Trap for the ERISA Fiduciary?"), let's review some of the general views on this issue
First, state retirement plans, like all government plans (and those of church associations, too), are not governed by ERISA. So Liu and his counterpart may not have the same stern legal obligation as do fiduciaries operating under ERISA. That itself should make ERISA trustees think twice before following Liu's footsteps. So what, if any, guidelines does Liu operate under when it comes to exercising his fiduciary duty as plan trustee?
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