From Crisis to Opportunity:
Reform Opportunities

At Calvert, we are intensifying our support for relevant principles and proposals that:

  • Ensure financial product originators disclose, address and retain responsibility for product risks. Financial products, just as pharmaceuticals and autos, affect consumer, community and societal health. These effects also can impair the value of corporate brands and reputations. Responsible, well-governed companies should proactively evaluate product impacts and fully disclose product risks. We also support mechanisms to ensure that financial product originators who package or securitize risky assets retain some accountability for these products. 
  • Support the efficacy of the Securities and Exchange Commission and other regulatory agencies. We endorse the SEC's efforts to strengthen the voices of shareholders and will urge the new Administration and Congress to appoint an SEC Chair who is supportive of shareholder rights.
  • Curb excessive executive compensation. Executive risks and rewards need to be transparent and better aligned with the interests of employees, shareowners and long-term corporate performance.
  • Strengthen accountability to shareholders.  Boards of Directors have an established duty to provide effective oversight of management to ensure that companies operate in the best interest of shareholders. We favor expanding this obligation to a broader set of stakeholders comprised of employees, customers and communities—constituencies heavily affected by the current financial crisis.
  • Promote greater financial and ESG transparency and disclosure. Among the many country codes of conduct developed in response to recent market crises, (some 40 codes among EU countries, alone) virtually all call for greater corporate transparency and full disclosure of company financial performance and ownership.
  • Promote a better balance between short-and long-term perspectives. Good governance often is compromised when a company emphasizes quarterly earnings and other short-term goals, rather than on the long-term soundness of the enterprise. We support reforming the network of tax, legal, accounting, regulatory and compensation incentives that pressure financial market participants to focus unduly on short-term profits.

Calvert continues to maintain an active presence as an investor and engaged stakeholder, working with other investors, regulators, industry representatives, consumer advocates and policymakers as opportunities arise. At the same time, we continue to advocate for fundamental reforms that will protect stakeholders, facilitate the creation of long-term value and restore confidence in financial markets.