I.A.M. National Pension Fund
1300 Connecticut Avenue N.W., Suite 300
Washington, D.C. 20036
June 3, 2003
Mr. Jonathan G. Katz
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609
RE: File No. S7-10-03
Dear Mr. Katz:
On behalf of the 299,000 participants in the $5.2 billion I.A.M. National Pension Fund, I am writing to urge the Securities and Exchange Commission to adopt rules allowing shareholder nominees to appear in the corporate proxy statement.
Investors have just come through an extraordinary market failure, with $7 trillion evaporating from the equity markets in three years. Accounting scandals at companies like Enron, WorldCom, Tyco and Healthsouth exposed widespread conflicts of interest and a shocking lack of corporate accountability to shareholders. We commend the SEC for responding with an unprecedented series of regulatory reforms to address the conflicts, but no amount of government regulation can ensure that boards of directors are accountable to the shareholders they represent.
Responsibility for director accountability ultimately falls to shareholders, who ostensibly have the right to both nominate and elect directors. Unfortunately, under the existing corporate election process, shareholders have no meaningful way to hold directors accountable regardless of how poorly a company performs, how much they overpay the CEO, or how conflicted the auditors are that they retain. In fact, shareholders can do little more than rubberstamp candidates nominated by the directors themselves given the tremendous costs required to run a proxy fight.
The SEC has the ability to restore genuine accountability to the boardroom by establishing authentic corporate elections. Specifically, granting equal access to the proxy will not only allow shareholders to nominate directors who we trust to independently represent our interests, it will also encourage incumbent directors to be more responsive to our concerns. Therefore, I urge the SEC to use its current review of the rules governing director nominations and elections to give shareholders access to the proxy for our director nominees.
Alan W. Skolnick