From: Bonnie Rembert [email@example.com]|
Sent:Thursday, September 04, 2003 9:28 AM
Subject: Re: File No. S7-14-03
Re: File No. S7-14-03
September 4, 2003
Jonathan G. Katz, Secretary
COMMENT ON SEC-PROPOSED RULE: NOMINATING COMMITTEE DISCLOSURES AND PROCESS and COMMUNICATIONS BETWEEN SHAREOWNERS AND CORPORATE DIRECTORS
Dear Mr. Katz,
I submit the following comments regarding Nominating Committee policies and disclosures for Board nominations, and greater vehicles for shareholders to communicate directly with Board members (SEC-proposed rule S7-14-03). This is a thoughtful step in tackling Directors' lack of accountability and obligation to shareholders, but a step I hope will lead to even more robust discussions of shareholder democracy and investor access to the corporate proxy statement.
Investor-proposed nominees are rarely given consideration by management during the nominations process. Shareowners therefore rely on expensive and time-consuming proxy contests to bring attention to their candidates, who often lose in contested elections because management spends shareholder assets to oppose such investor nominees. While greater disclosure of the criteria and processes for nominating Board candidates will be quite useful to investors, it may be difficult for the SEC to eliminate boilerplate disclosures by Board members. The SEC should also not mistake the tide of letters in support of greater disclosure and communication channels with board members as a sign that shareholder access is not needed by shareowners, for it is the crucial missing link in Board accountability and strong governance at most corporations.
Nominating Committee Disclosures
Shareholder Communications with Board Members
I additionally support the proposal of Boards reporting back to shareholders a summary of shareholder communications with Directors, actions taken in response to those concerns, and if the Board did not respond to particular communications, which executives did and why.
I would also like to see a summary report in the proxy statement of Director attendance at annual meetings, for I'd like to know which Board members are forgoing their duty of representing shareholders, and addressing their questions, at such meetings.
The proposed disclosures, while paving critical improvements to the transparency of corporate elections, are not enough to restore lost confidence in U.S. equity markets. It will be the combination of greater transparency and greater investor access to the proxy that will strengthen shareholder democracy, and Board accountability with it.
Bonnie Coker Rembert