September 27, 2007
Dear U.S. Securities and Exchange Commission:
I vigorously oppose any action by the Securities and Exchange Commission (SEC) to weaken the rights of Americans to present resolutions for votes by the millions of investors like me who own stock in companies. (This in reference to SEC File Number S7-16-07.)
Corporations serve the public at as a privilege, not a right, and this SEC proposal is an outrageous curtailment of the few rights that balance that privilege against excess. The reason this is being passed is because there is unprecedented activity by both individual investors and pension funds regarding a full spectrum of issues: Toxics, human rights abuses, exporting electronics and failure to address climate change.
There are two new legal cause of action in the area of climate change and toxic chemicals and this has, no doubt, ruffled the feathers of all those unresponsive, overpaid Board members and higher level executives. I urge the SEC and, if necessary, Congress to stop any initiatives that would limit the rights of shareholders to sponsor proxy resolutions or prevent investors from nominating members of corporate boards.
My bottom line here is simple: I believe that it would be better for the SEC to take no action on their shareholder resolution initiatives than it would be for the Commission to destroy the rights of shareholders.
The SEC is on the wrong track and probably being influenced heavily by those corporations who are being lobbied the most heavily by shareholders. In my view, we need more shareholder involvement in American corporations -- not less. I strongly support the rights of shareholders to use the resolution process to encourage responsible action by often troubled companies that engage in runaway CEO compensation, poor corporate governance, a history of polluting/inaction on climate change, racial/gender discrimination and other problem behaviors.
These problems often end up costing shareholders like me a lot of money in the long run as a result of lawsuits, clean-ups, damaged company reputations and other outcomes that drive stock prices down. The best remedy is when the companies in question are encouraged by shareholders to get on the right path and start acting as well governed, responsible corporate citizens. These are not companies that the SEC should be protecting from shareholders who are understandably concerned about what are often very serious risks to our long-term investments. These companies -- and, in fact, all companies -- need more scrutiny and feedback, not less.
I also believe that the real owners of America's companies should be able to help nominate corporate board members. This is a process that could use more openness and accountability. If you take a close look at Board identity, it is no wonder we are falling behind in innovative and anticipatory action on crucial issues such as climate change, product redesign and other related issues~ they are ananchronistic, overpaid fossils that are dampening any potential edge these companies could have.
Investors have a duty to take their ownership role seriously. At the same time, the companies have a responsibility to investors: They should be expected to listen to their shareowners -- rather than working to limit the rights of shareholders to raise important issues, including the selection of corporate directors.
The SEC should focus on putting the interests of investors first. I urge Congress to monitor this situation and get involved to ensure that, above all other things, the SEC is the servant of the American public and its best interests. Do not allow the voice of investors to be silenced!
Thank you for your attention to my comments.