CalPERS Plans to Take Softer Line in Tactics : Strategy: The giant state pension fund will shun proxy fights in favor of talks with management as a way to bring about change at companies.

More schmoozing, less bruising.

That is one way to characterize what Dale M. Hanson, chief executive of the California Public Employees Retirement System, calls the $64-billion pension fund’s “new kinder, gentler approach.”

Hanson said Monday that the Sacramento-based fund, a pugnacious leader in the movement to assert the rights of institutional investors, plans in the 1992 proxy season to de-emphasize shareholder resolutions in favor of negotiations with management as a way of bringing about change at companies.

Hanson said the shift in approach is not a big change, noting that the fund in the past few years has advocated dialogue before resolutions, proxy reforms and litigation.

“In practice, we were notifying the company (that we wanted change) at the same time we were delivering resolutions.”

The shift toward more conciliatory tactics was adopted by the fund’s board of trustees after a recommendation by the staff, Hanson said. It makes official a strategy toward which CalPERS had been moving.

In this year’s proxy season, for example, the fund ended up withdrawing 10 of 12 shareholder resolutions after the targeted companies agreed to make the desired changes.

Hanson said some board members have voiced concern that the change will seem like a weakening of power. They note Gov. Pete Wilson’s summertime effort to take control of CalPERS’ board during the state’s budget crisis. Although the effort failed, some fund activists saw it as an attempt to stifle the fund’s corporate governance activities.

However, Hanson said, shareholder resolutions could still be used in a pinch.

Sarah Teslik, executive director of the Council of Institutional Investors in Washington, said the shift points up the evolution in corporate governance.

“I think what Dale was saying was that, as CalPERS and others have matured,” she said, “they’ve discovered that the shareholder proposal is a last resort. The appropriate way to respond is to vote for directors.”