Sean Harrigan's departure as president of Calpers will be welcomed in some unlikely quarters around the world.

Predictably, the US business lobby will hope that it heralds a less activist stance. It has denounced the fund's agenda as politically driven the directors are either registered Democrats or labour unionists.

But few tears will be shed among the global corporate governance community over Mr Harrigan's departure. Under Bill Crist, his predecessor, the $177bn pension fund established corporate governance as a force for change across the world.

Funds respected Calpers for daring to tackle powerful business figures and queued up to support its aims.

In 1995, Calpers was the prime mover in the setting up of the International Corporate Governance Network, whose institutional members have assets of more than $10,000bn.

Much of that goodwill was squandered during Mr Harrigan's near two-year reign, because of his belligerent tactics. The gulf was illustrated in July at the Governance Network's annual gathering in Rio de Janeiro when Mr Harrigan publicly squared up to Alastair Ross Goobey, mild-mannered British chairman.

On the sidelines of the main conference hall, in full view of many delegates, Mr Harrigan launched into a finger-wagging tirade over the looming elections to the network's governing council.

Mr Harrigan was upset that Peggy Foran, company secretary of Pfizer, the pharmaceuticals group, was poised to become the first business person on the governing council, a move that Mr Ross Goobey supported.

There was no place for corporate figures in such roles, he argued. Calpers lobbied network members to thwart her election and nearly succeeded. In the end, she was only narrowly elected.

One Rio attendee recalled: “That typified Sean. He was demanding some sort of ideological purity. But the majority of us believe that it is better to get the business community on-side if we are to secure lasting and effective governance changes.”

Another UK governance activist said on Wednesday: “Sean's heart is in the right place but he never understood that thumping the table is not the best way to get companies to change. He comes from a union background, where it's all about confrontation. His approach alienated many of us who previously followed Calpers' lead.”

That same theme was aired at a Calpers board meeting weeks later. The gathering heard from luminaries such as Arthur Levitt, former Securities and Exchange Commission chairman, who warned that the fund must avoid “going off on political tangents which do not directly impact investment performance”.

Richard Koppes, a former Calpers general counsel, said the fund had become “too political”. He added: “There is serious concern that you are causing damage to the corporate governance movement.”

Calpers has led the investor charge to force corporate America to clean up its act after a spate of scandals but, say critics, many policies proved counter-productive.

Previously, the fund concentrated its fire on underperforming companies. But this year it decided to vote against the re-election of directors of companies that employed their auditors to provide non-audit services, such as tax and management consulting. This is not banned under the Sarbanes-Oxley legislation but Calpers believed it creates conflicts of interest for the auditor.

As a result, Calpers voted against directors at 90 per cent of 3,000 US companies during this year's annual meeting season.

In March, Calpers surprised many when it opposed the re-election of Warren Buffett to the board of Coca-Cola because he sat on the committee that approved the hiring of Coke's auditor for non-audit work. Mr Buffett is widely regarded as a champion of shareholder rights.

However, Mr Harrigan's tactics claimed some notable scalps. Earlier this year, Calpers helped force Michael Eisner to relinquish his chairmanship at Walt Disney, while last year it helped oust Richard Grasso as head of the New York Stock Exchange. And Calpers points proudly to the performance of its funds, which this year have delivered superior returns.