Arkansas Public Employees Retirement System

June 13, 2003

Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, NW
Washington DC 20549-0609

RE: File #S7-10-03

Dear Mr. Katz:

On behalf of the Arkansas Public Employees Retirement System ("APERS"), I would like to applaud and encourage the Commission's review of existing proxy rules with an eye toward much needed alignment of corporate management's interests with those of their stockholders. More comprehensive letters have already been filed with the Commission by associations with whom I am affiliated, most notably the Council of Institutional Investors ("CII") and the National Association of State Retirement Administrators ("NASRA"). However, as a fiduciary responsible for the retired lives of over 65,000 active members and beneficiaries, I feel it is incumbent upon me to register my own comments.

Admittedly, during the 1990's when we were all so handsomely rewarded for our equity exposure, it was easy for a pension fund such as APERS to ignore the fundamental themes of corporate governance. Didn't some governance groups seem like so many over-reaching whiners? Executive management, we thought, must be doing right by us as we watched stock prices shoot into the stratosphere. Perhaps the old agent-principal theory needed to be replaced by a new paradigm. Well, tens of millions of lost dollars later, the need, indeed the urgency, for regulatory review has never been more apparent.

As owners of publicly traded companies, stockholders have a legal right to meaningful access to the proxy, and these companies have an obligation to affirmatively respond to majority votes. Furthermore, stockholders have right to full and timely disclosure of information needed to protect our interests. This is particularly crucial to funds like APERS that function as the ultimate fiduciary to thousands of retirees. This, in turn, means that Self Regulatory Organizations ("SRO's") must be prepared to more fully align their interests with shareholders. The recent initiatives of the New York Stock Exchange in the area of corporate governance are to be applauded. It is hoped that other SRO's will follow suit in the very near future. Finally, zealous prosecution of those corporate executives who actively work to defraud the real owners of their companies could provide the needed "stick" (as opposed to "carrot") to remind management to whom they are obligated.

As others have stated more eloquently than I possibly could, the success of the capitalist model depends on the responsible alignment of interests of shareholders and corporate executives. Otherwise, what would truly separate corporate America from the "gangster" capitalism that so recently plagued Russia?

Thank you for considering my comments.


Gail H. Stone
Executive Director
Arkansas Public Employees Retirement System