From: Valerie Heinonen [heinonenv@juno.com] Sent: Wednesday, September 03, 2003 3:44 PM To: rule-comments@sec.gov Subject: S7-14-03 September 3, 2003 Comment on Proposed Rule: Disclosure regarding Nominating Committee functions and comunications between security holders and Board of Directors FILE NO S7-14-03 RELEASE NO 34-48301 IC 26145 Dear Sir or Madam: On behalf of Ursuline Sisters of Tildonk, U.S. Province, I am submitting comments on the SEC decision to increase disclosure with respect to corporate Nominating Committees and shareholder access to the Board of Directors. The Ursuline Sisters of Tildonk, Inc. has been a participant in corporate dialogues on social, environmental and corporate governance issues and both sponsor and co-sponsor of shareowner resolutions on these topics. We appreciate the SEC decision to present two different proposals on disclosure and shareowner access to the proxy to nominate Directors. The Ursuline Sisters believe the approach of improved disclosure and the right of investors with a reasonable per cent of shares to nominate Directors, place them on the proxy and have them voted upon will improve investor confidence and board accountability. We support the recommendation to require a company to disclose when it receives nominations from security holders, the procedures for nominating Directors, the process followed when there is a nomination and minimum qualifications for nominees. Additionally, we strongly recommend adding to the proposal whether and how the Nominating Committee includes diversity when recommending new Board members. A number of companies disclose this fact in their nominating committee charters and elsewhere. Diversity in a Board is an important for good governance. Shareholder resolutions sponsored by religious and other investors have resulted either in a company policy change and disclosure of the new policy or the resolution on the proxy received a reasonable level of support. We, therefore, recommend that the Nominating Committee be required to disclose if and how diversity, including gender and race, are considered when selecting new Directors and presenting the slate of Directors. Disclosure regarding ability of security holders to communicate with Board of Directors We agree that there must be clear procedures described for a security holder to communicate with Board Committees or Board members. Companies such as Pfizer have already determined a process for communication with outside Directors, including an e-mail box. Since outside Directors are responsible for Committees such as the Audit and Corporate Governance Committees, we believe it important to be able to communicate directly with those Committees. Thus we support the proposal stating that there be a description of how security holders can communicate with the Board and the Board Committees and action the Board took in response to such input. Investment Companies The proposal includes applying the new disclosure requirements to investment companies (“funds”). We agree that this proposal would benefit fund security holders in improving the transparency of the nominating process. The disclosure should include a description of who on the nominating committee are “interested persons” under the Investment Company Act. SUMMARY: The Ursuline Sisters of Tildonk, Inc. support the emphasis of these proposals and efforts to advance good corporate governance and increased transparency. We strongly urge that Board diversity be added to disclosure regarding the Nominating Committee’s role and responsibilities. We wish, too, to emphasize that these disclosures will truly be meaningful when combined with a second step, which creates the process whereby shareholders may nominate Directors to be placed on the company proxy for a vote. Yours truly, Valerie Heinonen, o.s.u. Valerie Heinonen, o.s.u., Consultant, Corporate Social Responsibility 205 Avenue C, #10E ~ New York, NY 10009 Phone and Fax: 1-212-674-2542 ~ E-mail: heinonenv@juno.com