Pension fund trustees inCalifornia want companies to publicly declare how they investigateharassment complaints, disclose settlement costs to investors, andpublish information about policies to protect workers and promotediversity. (Photo: Shutterstock)

(Bloomberg) –A group of trustees from some of America's biggestpublic pensions are calling on companies to detailcosts related to sexual harassment and any measures they're takingto address the problem.

“We don't see how it could possibly be accretive to corporatevalue to have a culture that allows for sexual harassment in theworkplace,” said Priya Mathur, the departing president of the $345billion California Public Employees' Retirement System,the largest U.S. pension fund.

Companies are losing customers, paying settlements and higherinsurance costs and being distracted “from their core strategiesbecause they have to deal with this.”

Together with Sharon Hendricks, the board vice chair of the $219billion California State Teachers' Retirement System, Mathur formedTrustees United, a group of 13 of the state's female pension fundtrustees seeking to improve corporate disclosures on sexualharassment, violence and misconduct.

They want companies to publicly declare how they investigateharassment complaints, disclose settlement costs to investors, andpublish information about policies to protect workers and promotediversity.

'Long-term value'

“Without sufficient data, we really don't know what companiesare paying,” Mathur said in an interview.

The first woman to chair the biggest U.S. pension fund, Mathurwill end her tenure this week. “We can all list ways in which wethink this is costly to companies and investors, but for us to doanalysis and really identify which companies are developing aculture that is supportive of productivity and long-term valuecreation, we need more data.”

California has been a leader in promoting diversity and takingaction against harassment:

• As of 2019, new laws prohibit non-disclosure agreements insettlements of sexual harassment, assault or discrimination;
• require employee harassment training;
• and mandate that boards of publicly traded companies based inthe state have at least one female director.

The new group, which also includes trustees from the Los AngelesCity Employees' Retirement System and the Los Angeles CountyEmployees' Retirement Association, is asking their colleagues andpension fund trustees around the world — male and female — to signon to its principles.

Joining forces

The idea for the group started on a bus ride following atrustees' network meeting last March on investment risks fromsexual harassment. Mathur, Hendricks, CalSTRS board chair DanaDillon and CalPERSboard member Theresa Taylor decided they neededto join forces.

Over the course of the year, both pension boards adoptedlanguage in their investment policies aimed at pressing companiesto disclose more about harassment. Similar language was proposed ata LaCERS board meeting last week.

“I don't think we're alone in tackling these issues, but we'reat the top of the investment chain so to speak, and we have aunique opportunity and responsibility to take this on,” Mathursaid. “There's clearly an inflection point in our society wherewe're saying we're no longer going to tolerate this behavior, andthat's an important signal to investors.”

READ MORE:

5 questions to help  guide the overhaul ofyour sexual harassment policies

Constructing a workplace environment that rejectssexual harassment

The cost of unreported sexualharassment

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