September 7, 2007
Christopher Cox, Chair
Securities and Exchange Commission
100 F Street, NE
Washington D.C. 20549-1090
File Number: S7-16-07
Dear Chairman Cox:
I am writing to support the SEC regulations, as currently established, which apply to the filing of precatory shareholder resolutions.
The Sisters of Mercy of the Americas have invested significant funds in U.S. stocks and bonds, and those of other global corporations. We do so in the belief that our financial resources will promote justice and the common good. We annually file shareholder resolutions, and take part in discussions on issues related to management, employment, health, environment, and social issues.
As investors, we know that our rights and access are guaranteed under state law. These rights include the right to petition management, address all investors, and file relevant proposals on corporate governance and societal matters. Access is regulated through the Securities and Exchange Commission. We appreciate this system, which has worked well over the years.
The resolutions we file are advisory, and have sometimes resulted in meetings with management and Boards of Directors. At other times, investors have listened to us and changed policies and practices on such issues as HIV/AIDS, the environment, and lending to low-income populations.
We find the current regulation that an investor must have owned $2,000 worth of shares for a year to be reasonable. The current voting threshold for re-submitting resolutions needs to remain at 3% for the first year, 6% for the second, and 10% for the third. The disclosure of votes at the end of the annual meeting is satisfactory, and should only be based on votes cast.
We believe the current regulations established by the SEC should remain in force. The system of oversight by the federal government has worked well. Dismantling that system, or requiring states to provide the oversight, would be a disservice to both corporations and investors.
We are concerned about using an electronic forum as an alternative to the current precatory proposal system because it will exclude many investors. It has problems as a vehicle for investor communication, and for raising concerns with management. Therefore, we support the continuing sponsorship of an advisory resolution as a practical way to address issues. We oppose abolishing the precatory resolution process, as it would allow corporations to operate without regard for the global community. Investors serve an important function by sharing their knowledge and expertise on issues and the impacts of decisions with management and Boards of Directors.
Sisters of Mercy of the Americas