NEW YORK, New York - TIAA-CREF announced today its strong support for a series of corporate governance reforms recommended by a panel of the New York Stock Exchange and called on the NYSE Board of Directors to approve the proposals.

"TIAA-CREF applauds and strongly supports the substantive and sorely needed corporate governance reforms recommended by the panel and urges the Exchange's Board to swiftly approve them," said John H. Biggs, TIAA-CREF Chairman, CEO, and President. "The measures have real weight to them and will therefore provide a much needed stimulus for boosting investor trust that directors are first and foremost seeking to represent shareholder interests."

"Even before, but especially since the collapse of Enron, investor confidence in United States capital markets has been shaken by a rash of events and disclosures indicating that numerous boards of directors are not meeting their fiduciary responsibilities to shareholders," observed Peter C. Clapman, TIAA-CREF senior vice president and chief counsel, Corporate Governance. "The proposals advanced by the Corporate Accountability and Listing Standards Committee, when implemented, can create a much healthier balance between the prerogatives of management and the rights of shareholders," added the executive of the major financial services organization.

In urging the NYSE Board to give final approval to the reforms, Clapman particularly praised the recommendations that corporate boards be composed of independent directors under improved definitions of "independence," and that key committees -- audit, nominating (corporate governance), and compensation -- be drawn solely from this independent group. "These steps, which represent guidelines and objectives similar to TIAA-CREF's corporate governance program, would be a significant step in assuring that boards perform the proper roles required for our corporate governance system in the United States to work well," he said.

TIAA-CREF also believes that the NYSE panel's provisions as to the role of directors and additional particulars as to how the key committees should function also would constitute a significant improvement in corporate governance practices. "There is great public concern currently that audit committees are unequal to the challenges of understanding and monitoring the risk exposures of their companies, that compensation committees are not adequately assessing and determining fair compensation practices so as to eliminate the abuses that have become all-too-common, and that nominating committees either do not even exist under current requirements or are not sufficiently performing their role in recommending board members and evaluating their performance," Clapman said.

The panel's call for shareholder voting on all equity-based compensation plans that dilute shareholder ownership, whether put in place for managers or for all employees, also echoes another strongly held governance principle of TIAA-CREF's.

"We think stock option programs can play a constructive role in compensating employees and providing incentives," Clapman said. "But if, because of a stock option plan, current shareholders are going to have economic value and voting power transferred away from them, they should have a say in the matter. Therefore, in regard to the panel's proposals to require such approval, we strongly urge the New York Stock Exchange's Board of Directors to adopt them. Furthermore, we call on NASDAQ to take similar action, rather than allow companies to insulate such equity compensation plans from shareholder vote. Indeed, the one instance that saw a shareholder vote on the subject -- the recent Mentor Graphics annual meeting where 57.2% of shares voted supported TIAA-CREF's resolution calling for the company to require shareholder approval of its dilutive stock option plan for non-management employees -- clearly shows that shareholders believe that the ability to approve or disapprove s
uch plans is a basic shareholder right."

Clapman also urged other institutional investors, trade associations and shareholder organizations to coalesce around the reform proposals, and he asked that the Securities and Exchange Commission add its support and ultimate influence to harmonize improvements in corporate governance across all major exchanges at the highest levels of good corporate governance practices. "Companies should not be able to make listing decisions based on ease of compliance with an exchange's corporate governance listing standards," he said. "The financial community and the entire nation have a huge stake in remedying the ills that have plagued too many boardrooms and eroded confidence in our capital markets."

TIAA-CREF, with approximately $275 billion in assets under management, is the premier pension system for people employed in education and research in the U.S., serving over two million participants at more than 11,000 institutions. The organization is widely recognized as a major voice for shareholder rights and improved corporate governance. In addition to providing pensions, the TIAA-CREF group of companies offers after-tax annuities, mutual funds, life and long-term care insurance and trust services to the general public. TIAA-CREF Tuition Financing, Inc., a subsidiary of TIAA, manages 13 state-sponsored college savings plans, more than any other company.

TIAA-CREF

TIAA-CREF

TIAA-CREF is a national financial services organization with more than $380 billion in combined assets under management (6/30/06) and the leading provider of retirement services in the academic, research, medical and cultural fields.

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