October 4, 2010
Subject: File No. DF Title IX - Investor Advocate
From: Mary Rowe, PhD
October 4, 2010
My comment overlaps much of the comment from Tom Kosakowski:
I strongly recommend that the committee become familiar with the various kinds of ombudsmen: legislative, executive, organizational and advocate. All are meant to share essential characteristics of independence, impartiality and confidentiality, but they differ in other, very significant respects.
There are at least two resources that should be considered required reading:
- The American Bar Association's "Standards for the Establishment and Operation of Ombuds Offices," February, 2004 (http://www.abanet.org/adminlaw/ombuds/115.pdf) and
- The Coalition of Federal Ombudsmen and Federal Interagency ADR Working Group Steering Committee's, "A Guide for Federal Employee Ombuds," May 9, 2006 (http://www.adr.gov/pdf/final_ombuds.pdf).
Based on the few details provided by the Dodd-Frank Act (which indicates that the SEC ombuds will be an "advocate" for external stakeholders), it would seem that a legislative or advocate ombuds might be the best fit. Many legislative and advocate ombudsmen practice to standards endorsed by the United States Ombudsman Association (http://www.usombudsman.org/en/references/standards.cfm)
If there is to be an SEC Ombuds to serve internal constituents such as employees, an organizational ombuds would be appropriate. If this model is selected, the Standards of Practice and Best Practices promulgated by the International Ombudsman Association should be considered, for example, with respect to where the Ombuds Office will report. (http://www.ombudsassociation.org/standards/). The IOA Standards should also be followed if companies overseen by the SEC are required to establish internal Ombuds Offices.
In any case, the committee should take care not to confuse the differences between the types of ombuds. A "pure" model of one kind or another should be created so that the applicable professional standards are not degraded by the new office.