The Congress of the United States spent more than two years on ERISA, the Pension Reform Act of 1974, hearing countless witnesses, conducting dozens of studies, and considering a raft of alternative proposals. Yet there is not one mention in those thousands of printed pages of the social or political implications of the pension funds, and very little concern for the economic impacts, on capital market or capital formation… -Peter F. Drucker (1976)1

The Ontario Teachers’ Pension Plan led a successful group of bidders for Bell Canada (BCE)2 on June 30. According to the New York Times (July 1, 2007), ‘The deal for Bell Canada, worth about 51.7 billion Canadian dollars ($48.8 billion), would be the largest leveraged buyout ever.’

The Canadian Pension Plan Investment Board put BCE in play, and a number of other large Canadian plans indicated interest in bidding before withdrawing.

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Some things I read just mystify me.

FinancialNews-US.com reported on June 27 that former US Vice President Dan Quayle had joined the board of Heckmann Corp., which it described as a ‘blank check’ company. It continued:

‘Blank [check] companies, which have no defined business plan and are set up to buy an unspecified company or assets, have become increasingly popular in the last couple of years, but have been controversial because investors do not know what they are buying.’

Controversial?! A number of other words came to mind.

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I am very pleased to introduce to you KLD Research and Analytics’ new Blog.  We will be posting news, commentary and updates on issues relevant to integrating environmental, social and governance data into investment decision making.

Sincerely,

Peter D. Kinder, President and Co-Founder

Update 1

SEC Chair, Christopher Cox, announced in testimony before the US House Committee on Financial Services that the SEC will issue new proxy rules before the next proxy season:

‘In connection with the Commission’s review of our proxy rules governing shareholder proposals, we have just completed a series of roundtables that considered, among other issues, the future role of technology in facilitating communications not only between shareholders and their company, but also directly among shareholders themselves. As we prepare to put new proxy rules in place in time for the next proxy season to address the implications of the court’s decision in AFSCME v. AIG, the Commission is also considering ways to facilitate greater online interaction among shareholders by removing any obstacles in the current rules, such as the ambiguity concerning whether use of an electronic shareholder forum could constitute a proxy solicitation.’

FinancialWeek.com reported Cox indicated the regulations (regs) would appear next month.

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Whatever the rights and wrongs of mission-related investment, the bad press of the past few weeks may mark a shift for the foundation, into an era when public opinion no longer takes for granted that giving alone is virtuous. -The Economist (2007)

By May the uproar caused by the stories in January about the inconsistencies between the Gates Foundation’s investments and its programs had subsided to a dull roar. The story then exploded again around Warren Buffett’s coming $31 billion contribution to the Foundation and his company’s investments and Darfur.

It seems, therefore, the right moment to take stock of some lessons to be drawn from the renewed furor.

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Some years ago, I whined to a friend, a management consultant, about some management problems I was having. With a look of pity for the forgetful, he raised his hand and spread his fingers as far as they would go.

“What’s that mean?”

“Maslow – the span of control.”

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For a couple of generations, commentators have described SRI as a three-legged stool:

• shareholder advocacy,

• screening and

• community investing

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