Executive Director Limitations: New STRS policy adopted by Board

Originally introduced by Board member John Lazares, this policy was adopted at the February 16, 2006 Board meeting, passing with a vote of 9 - 0 (two members absent). THANK YOU, JOHN!

Policy Title: General Executive Constraints

The Executive Director shall not cause nor allow any act, decision, activity or circumstance that is imprudent, in violation of commonly accepted business and professional ethics, or a breach of fiduciary responsibility.

The Executive Director shall also inform the Retirement Board of any known material violation of commonly accepted business or professional ethics, or a breach of fiduciary responsibility by a business or professional vendor or contractor engaged by STRS Ohio. Material violations are interpreted to mean a finding or conviction by a state or federal agency or court, or a settlement in which the vendor admits to wrongdoing.

The Executive Director shall monitor and notify the Board when an STRS Ohio vendor admits to, or is found to have committed, a material violation of business or professional ethics and to recommend a course of action to the Board. Monitoring shall include ongoing review of agency actions (e.g., Pensions and Investments, FundFire, Compliance Review, etc.).

The Board shall evaluate the nature of such known violations with respect to the following criteria in order to judge whether or not to continue in relationship with said vendor or contractor.

A. The Board's Fiduciary Obligations including those set forth in Section 3307.15 of the Ohio Revised Code

B. Nature of the Violation

C. Impact of the Violation on STRS Ohio

D. Materiality of the Violation

E. Terms and Conditions of STRS Ohio's Contract with the Vendor or Contractor

F. Confidentiality of Information and Impact on Investments

The Board may use information identified in the monitoring process as a basis for inviting the vendor or contractor to appear at a Board meeting to address questions related to the matter. Any information so gained shall be used by the Board and its members at all times with consideration of fiduciary duties.