Corporate Governance -- Enhancing the Return of Capital Through Increased Accountability

Election Reform: Instant Runoff Voting for CalPERS Ballot

Sometimes representatives get so entrenched in office they forget who they have been elected to serve. In an attempt to remedy the situation, California voters passed proposition 140, placing term limits on members of the Legislature. Similarly, CalPERS staff recommended adoption of corporate governance policies which would consider anyone sitting on a corporate board for more than 10 years as no longer "independent." After 10 years, they considered it highly likely that board members would essentially become part of the management team, rather than an independent voice for shareholders.

With the tenure of several members of the CalPERS board reaching well beyond a decade and with one serving more than 30 years, it's time to consider reforming our election process. Let's take what measures we can to ensure the board is accountable to the members. Let's rid the system of time honored but corrupting practices, such as accepting gifts from those doing business with the fund.

Board members have two distinct advantages which make it nearly impossible to elect challenger when an incumbent chooses to run.

  • Incumbents can travel throughout the state speaking to voters at System expense.
  • No runoffs are held, allowing a candidate unpopular with most voters to win.

This proposal addresses the second issue. It is relatively easy to get on the CalPERS ballot and members who oppose the incumbent often split there votes among up to 50 candidates. Theoretically an incumbent who is the last choice of 95% of the voters could win with 5%, if each challenger got a little less than 2% of the vote.

CalPERS elections are expensive, costing up to about $1 million, so holding a runoff of the top two candidates would add to that significant expense. Instead, I propose consideration of an alternative known as instant runoff voting (IRV). IRV expands the range of voter choice, eliminates the "spoiler" impact of long-shot candidacies and is a practical solution which avoids the expense of runoff elections. IRV is equivalent to a series of runoff elections conducted by allowing the voter to rank the candidates in order of preference, 1, 2, 3, and so on.

The candidate who receives the fewest number of first choices from the voters is eliminated in the first count and all his or her ballots are re-distributed to the voters second choice. Each successive count eliminates the next lowest polling candidate, transferring his or her ballots, until one candidate achieves a majority. Although it sounds like a laborious process, the redistribution of votes can easily and quickly be done by computer.

The Irish presidential elections, for example, are run by IRV. In 1990 the three candidates running for the office -- Brian Lenihan, Mary Robinson, and Austin Currie -- received 44%, 38%, and 17% of the first choice votes, respectively. Robinson was the second choice of most of Currie's supporters, resulting in her becoming Ireland's first woman president with a 53% majority, which, in turn, indicated her more broadly based support among the electorate. With IRV, Gore would have been elected instead of Bush.

CalPERS elections are typically much more problematic than the Irish example because so many more candidates involved. For example, in the at-large elections held in 1997 the two incumbents, Chuck Valdes and William Rosenberg, retained their seats against a field of 22 candidates by winning 17.3% and 12.5% of the vote. Since voters did not rank the candidates, we don't know if the incumbents were the first choice of a small group and the last choice of the majority, or if they really were the preferred candidates.

Update 2001: After Bill Crist's election fraud, and at my urging, the Board finally held a workshop on election reform. However, many Board members believed IRV is too complicated for the average CalPERS member to understand (essentially were too stupid to be able to rank the candidates). Instead of IRV, the Board voted to institute an expensive run-off process, costing an extra $1 million of our retirement funds. If elected to the Board, I'll advocate regulations to institute Instant Runoff Voting.

To learn more about IRV and other ideas for voter reform contact:

The Center for Voting and Democracy
P. O. Box 60037
Washington, DC 20039

Contact: jm@perswatch.net

 

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