Pension Funds Threaten to Sue AIG

Andrew Williams, a director of the Center for the Study of Fiduciary Capitalism at Saint Mary's College, was quoted in an article that appeared in the Contra Costa Times and about a possible lawsuit against insurance giant American International Group by California's two biggest pension funds.

The story notes that calls for legal action from the head of the California Public Employees Retirement System suggest that CalPERS will maintain -- and perhaps intensify -- its activist role in pressing corporations to reform their operations and improve their ethics.

"CalPERS stepped up to the plate in the past and will continue to do so," said Williams.

What's more, it may be essential that a big investment entity such as CalPERS remain active in this area.

"They have to do this because of their size and their fiduciary responsibility to their beneficiaries," Williams said. "They have to be vigilant. The equity markets need to be monitored, and institutional investors are a major factor in that monitoring."

* Contra Costa Times