October 1, 2007
Nancy Morris, U.S. Securities and Exchange Commission
Dear Nancy Morris, U.S. Securities and Exchange Commission,
The SEC is supposed to be the Investor's Advocate. But the two proposed options for shareholder proposals and director elections undermine investor rights. One would take away shareholders rights to file proxy access proposals. The second would set the bar for proposals too high, effectively blocking long term shareholders from the proxy ballot.
Corporate scandals, such as corporate spying at Hewlett-Packard, the stock options backdating scandal at UnitedHealth Group and excessive executive pay highlight the need for strong and independent boards of directors to oversee management and prevent such abuses. The costs of not allowing shareholders to act as owners are great. Enron and WorldCom hurt the economy, hurt workers and hurt retirement funds. Shareholders' ability to nominate directors would take power away CEO-dominated boards and give it back to a company's owners--its shareholders.
Additionally, the very right to file shareholder proposals is a critical investor protection. The shareholder proposal process has played a vital role in improving corporate governance and promoting greater board accountability to shareholders. It would be alarming if the SEC were to enact rulemaking that would infringe on the ability of shareholders to raise important issues with corporate management.
As an investor, I expect the SEC to protect my rights, not roll them back. I urge you to reject both proposed rules for shareholder resolutions and the election of directors.
Delegate Eleanor Norton