Thought Leadership Thursday
More Than Just Dollars and Cents – The Strength of the Treasurer’s Office as a Policy Maker
Thought Leadership Thursday Article
Since taking office in January 2019, engaging on the full scope of the office and enhancing residents’ understanding of what a State Treasurer does has been a priority of mine. There is no shortage of ways that State Treasurers can be a powerful voice on behalf of sound policies that benefit our residents. Despite our unique aspects, our offices have tremendous potential to move policy and improve the quality of life in our states in ways that go beyond just dollars and cents.
The unique platform we have as fiscal stewards can and should be leveraged to improve our communities. While acting in the interest of our states, we can encourage companies to make changes and adopt practices that improve the way we and they do business. My office, alone and in partnership with other institutional investors, has leveraged our power as shareholders to encourage companies to improve their corporate governance and reduce risk exposure for the benefit of their shareholders. Enhancing returns and better management of risks, on portfolio and enterprise levels, has been a key objective for me and should be for any fiduciary. My engagement as a shareholder has been grounded in these objectives.
A recent success with our corporate governance work was with Investors for Opioid and Pharmaceutical Accountability ("IOPA"), representing a combined $4.3 trillion dollars in assets under management. IOPA secured a commitment from Amgen, a multinational biopharmaceutical company, to publicly disclose the application of its clawback policy. We did this by collaboratively engaging with the industry around the risks associated with opioids, pricing practices, and corporate governance. The result is that there will be an improvement in the disclosure of how the company manages risk and a policy which supports public health by discouraging short-term profit-seeking behavior.
In NAST, we have all seen a focus recently on propagating ABLE programs in our states. In Connecticut, we are taking support for people with disabilities a step further. We worked with other investors on Corporate Disability Inclusion calling on our 20 top holdings to incorporate best practices for disability inclusion into their workplaces. In addition to the ethical and moral arguments for a more inclusive society, there is research that demonstrates companies that embraced the best practices for hiring people with disabilities outperformed their peers on income and profit margins.
Our work often takes us before our state legislatures and the community. In fact, within the past 30 days alone, my office has weighed in on a dozen pieces of legislation. The signature piece of legislation that I introduced this session concerns incorporating financial literacy into our public-school curriculum, which is also a NAST priority. Just days ago, I had the chance to testify on this legislation before the Education Committee and laid out why our state needs it. The legislature wasn’t the only place we focused on this important priority. I kicked off my statewide Economic Empowerment listening tour by meeting with a group of teachers to discuss the importance of teaching financial literacy. My office also created a portal on our website providing information on financial literacy and programs available to residents in order to make these resources more accessible. Our students and families are ill prepared to succeed without a baseline of financial knowledge. We’re working with the General Assembly and in our own office to provide a sound financial footing for the next generation of Connecticut.
As stated above, I regularly travel the state and speak to groups about their concerns and have the opportunity to be a hands-on participant in improving the lives of Connecticut’s residents. We work through discussing saving for college using our Connecticut Higher Education Trust (CHET) 529 plan at a community breakfast, or meeting with members of a senior center to talk about the Volunteer Income Tax Assistance (VITA) program for those on a more modest fixed income. For me, direct civic engagement represents an important aspect of my work as Treasurer.
In Connecticut, I have the power of an investor and debt issuer and I sit on more than 30 quasi-governmental boards and commissions that touch everything from housing to water port management. As Treasurer, I have the ability to work with the legislature and the ability to work directly with residents and the business community. I use them to advocate for outcomes that are beneficial to my state and its stakeholders.
Although we are a unique bunch, one of the few things that can be said to be universal about being a State Treasurer is the power of our positions to shape policy and voices to call for meaningful fiscally responsible changes and to provide the tools and strategies that will improve opportunities for our residents. The best investment we can possibly make in a Treasurer’s Office is to empower the people we serve.
Hon. Shawn T. Wooden