Elizabeth M. Murphy, Secretary
Securities and Exchange Commission
100 F Street, NE, Washington, DC 20549-1090
via e-mail on March 13, 2009
Dear Ms. Murphy:
I write in support of the rule to eliminate uninstructed broker votes in corporate director elections and to urge prompt approval, after many years of waiting, of the NYSE's proposed changes to Rule 452. Legalized ballot stuffing was never a good idea.
Although I definitely favor the proposed changes to NYSE Rule 452, I do share concerns that some have expressed, and that we have witnessed with the adoption of e-proxy rules, that too few retail shareowners are voting. The SEC should undertake an education program to emphasize to the public the importance of educated voting to ensure the election of well qualified directors and best corporate governance practices.
A panel of retail investors should be convened to explore how to get shareholders to think like shareowners. Something is wrong when our system of corporate governance depends on investors to vote in corporate elections but too few seem to care.
Institutional investors are often conflicted but they vote because they have a fiduciary duty to do so. Individual retail shareowners are now down to a voting level of about 5% under e-proxy. So far, they get little or no help from organizations like Better Investing or the American Association of Individual Investors, which appear too focused on their own marketing endeavors and the public's fascination with stock picking strategies. Education on responsible investing should include a substantial segment on responsible owning. How can we get more shareowners to vote and, equally if not more important, get them to vote intelligently?
One strategy, being pursued by the Investor Suffrage Movement (ISM http://isuffrage.org/ ), is to simply develop a system that will allow shareowners to assign their voting rights to someone else... someone who will take the time to figure out how to vote, based on substantial research. ISM also makes activism easier by linking shareowners with like-minded activists who will essentially lobby corporations (through resolutions and other actions) on their behalf.
Another strategy is that of ProxyDemocracy (PD http://proxydemocracy.org/ ), which develops systems that facilitate the retail investor's ability to learn from and/or copy the vote of thoughtful institutional investors that announce their votes in advance of annual meetings.
The SEC should approve the proposed rule immediately and should then educate the public on the importance of proxy voting, encourage institutional investors to announce their proxy votes in advance of meetings, and should facilitate the development and spread of systems like ISM and PD, which help retail investors vote more intelligently.
James McRitchie, Publisher