S7-10-03
From: Fanning, Michael [mfanning@cpfiuoe.org]
Sent: Tuesday, June 03, 2003 3:00 PM
To: 'rule-comments@sec.gov'
Subject: S7-10-03


I understand that the Securities and Exchange Commission is considering reform 
of the rules governing how shareholders can vote their proxies at the annual 
meetings of corporations.  I have followed this issue both personally and 
professionally for a number of years, and I encourage the SEC to conduct the 
review.  I believe that a number of improvements need to be made to the proxy rules.


I have attended annual meetings and filed shareholder proposals, and I am 
sometimes amazed at the reactions of CEO's and Boards of Directors to shareholder 
input, especially through the shareholder proposal process.  The attitude of 
some companies is to treat shareholders like nuisances, rather than respecting 
shareholders as owners of the company.  At some companies, the CEO runs the 
company as a personal fiefdom, populating the Board with yes-men and yes-women, 
who, in turn, reward the CEO and management with extravagant compensation schemes.  
The last few years have resulted in headline after headline of companies where 
these arrangements and the ensuing lack of oversight have led to disastrous 
consequences not only for shareholders and investors, but also for confidence 
in our capital markets, which is crucial for our economy.   

Many times, Boards and/or their CEO's will attempt to prevent shareholders 
from even having the opportunity to express their opinion to the Company by trying 
to exclude important and relevant proposals from even appearing in the proxy 
materials.  I believe this is wrong.

There are many companies who have good relations with shareholders and who are 
respectful of shareholder input, and that is great.  But when that is not the case, 
the current proxy rules are often times an impediment to fostering a lively 
exchange on important issues at the company.  The current rules are often used 
to stifle debate and shareholder input rather than to consider shareholder input 
in a respectful and meaningful manner.  I believe the SEC should consider allowing 
shareholders to nominate and select directors without going through an expensive 
proxy solicitation, as this is one of the few ways to focus directors on their 
responsibilities as guardians of shareholders rather than as tools of management.

Again, I encourage the SEC to review the rules governing the voting of shareholder 
proxies, to provide the means to allow shareholders to fully exercise their 
responsibilities as owners and investors.  And I thank you for the opportunity 
to provide this input.

                                                Michael R. Fanning