From: Bonnie Rembert []
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
U.S. Securities and Exchange Commission
450 Fifth Street NW
Washington, DC 20549-0609


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
I fully support the recommendations that Nominating Committees disclosures when they receive nominations from security holders, as well as the procedures for nominating candidates for the Board. I also support detailed disclosures regarding the qualifications of, and criteria for, Board candidates, including those suggested by investors. I would also like to see diversity of the Board as part of the criteria for consideration, and a description of how each candidate meets independence requirements outlined by the stock exchange listing reforms. I further support transparency of the nominators behind candidate for the Board, including those proposed by shareholders and Board search firms. This information is quite useful to investors in determining conflicts of interest and the measure of independence Board candidates have from management, other Directors, and the company itself.

Shareholder Communications with Board Members
It is well known that Board members rarely respond to communications from shareowners. Calls, letters and emails are often routed through Investor Relations or corporate executives, who often decide to filter such correspondence. Such procedures do not uphold the basic premise that Board members directly represent shareholders. The channel of communication between security holders and Boards should be quite clear, and easily accessible -- not buried 20 pages into a corporate web site. Just as the revised NYSE listing standards proposed direct channels for communicating with Audit Committees, should there be a problem, investors should have direct access -- via emails, phone numbers, faxes, and addresses -- to the Board members representing them.

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

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