RS 11:314

§314. Constructive engagement; direct ownership of securities A. Each system, plan, or fund, referred to in this Section as "system", to which this Subpart applies shall adopt and implement a corporate governance strategy of constructive engagement of each company, in which the system has a direct ownership of securities, having facilities or employees or both located in a prohibited nation. Such corporate governance strategy of constructive engagement shall contain a plan of system action to cause any such company to remove facilities, employees, or both from any prohibited nation. Such plan of system action shall be implemented by not later than one hundred twenty days after August 15, 2007. The system shall continue to implement such plan of system action with respect to a particular company for the period of time that the system continues to possess an ownership interest in the company. As part of each system's corporate governance strategy of constructive engagement, the system shall make its best efforts to identify all such companies. Such efforts shall include all of the following: (1) Reviewing and analyzing publicly available information regarding companies having facilities or employees or both located in a prohibited nation, including information provided by but not limited to nonprofit organizations, research firms, international organizations, and government entities. (2) Contacting and obtaining information from asset managers contracted by the systems who invest on behalf of the system in companies having facilities or employees or both located in a prohibited nation. (3) Contacting and obtaining information from other institutional investors, including other public pension systems, that have divested themselves of investments in companies having facilities or employees or both located in a prohibited nation. B. Such corporate governance strategy of each system to which this Section applies shall require the system to form strategic shareholder alliances, whether formal or informal, with other public pension systems that have a common ownership interest with the system in any company having facilities or employees or both in a prohibited nation for the purpose of effecting change in the company's policy so as to cause the company to remove its facilities, employees, or both from any prohibited nation. In pursuing such shareholder alliances, the following provisions shall apply: (1) The systems to which this Section applies shall semiannually provide to each other a list of companies in which the system invests that have facilities or employees or both located in a prohibited nation. If any systems to which this Subpart applies possess common ownership interests in such companies, those systems shall form a strategic shareholder alliance, whether formal or informal, for the purpose of influencing such companies to cease having facilities or employees or both located in a prohibited nation. (2) Each system to which this Section applies shall, separately or jointly with another system that is a member of a strategic shareholder alliance under this Section, submit semiannually, to each such company having facilities or employees or both located in a prohibited nation, a notice that provides for all of the following: (a) Informs such company of the requirements of this Subpart and of the company's status as having facilities or employees or both located in a prohibited nation. (b) Requests that such company refrain from continuing to have facilities or employees or both located in a prohibited nation. (c) Details the nature of any strategic shareholder alliance of which the system is a member pursuant to this Section, which notice shall include a list of systems, whether this Subpart applies to those systems or not, making up such alliance. (d) Details the percentage of shares that each member of the strategic shareholder alliance possesses. (e) Informs such company that it may become subject to divestment by the systems in the shareholder alliance if such company continues having facilities or employees or both located in a prohibited nation. C. Each system to which this Section applies shall adopt rules necessary to implement the provisions of this Section. D. Each system to which this Section applies shall report compliance with this Section to the House of Representatives and Senate committees on retirement as part of the report submitted pursuant to R.S. 11:312(C). Acts 2007, No. 352, §1.