From: Kenneth C. Froewiss
To the Commissioners, with regard to the Mutual Fund Directors Independence Rule S7-03-04:
I am an independent member of the New York DWS Scudder Funds board. Our (independent) chair, Dawn-Marie Driscoll, has already shared with you her own views on the subject of the Independence Rule. Since I concur with her thoughts on this topic, viz., I am in favor of mandating that 75% of of the directors be independent but would let each board decide whether an independent chair best suited their particular needs, I will limit my remarks to two points of elaboration.
First, if the 75% rule were adopted, I would urge that a generous amount of time be allowed for boards to come into compliance. Identifying and agreeing upon a suitable new board member is not always so simple, and it is surely in the interest of the shareholders that this process be carried out in a thoughtful and deliberative manner.
Second, it seems to me that some of the same considerations that argue against requiring that 100% of the directors be independent are relevant to the question of whether the chair should be required to be independent. With thousands of funds, it should not be surprising that what works best for some may not work best for all. Moreover, individuals who are asked to serve as a director of a fund are often, if not typically, people who already have other major professional responsibilities. Hopefully, they tend to be individuals who would hesitate to take on the additional duties of chair unless they were certain that they could discharge those duties in a first-rate manner. Thus, it is easy to conceive of a situation in which a board consisted of absolutely top-notch directors, no one of which were comfortable agreeing to serve as chair.
I hope that these remarks are helpful in your deliberations.
Kenneth C. Froewiss