To: Public File
From: David G. Nason
Counsel to Commissioner Atkins
Date: October 15, 2003
Re: File No. S7-19-03

On October 15, 2003, Commissioner Atkins and David Nason met with representatives of the Business Roundtable regarding the above-referenced matter. In attendance were: John Castellani, Patricia Engman, Peggy Foran, Amy Goodman, James Melican, and Monica Medina

They made the following general points:

  • Governance reforms have significantly increased the time and resources necessary to deal with governance issues, but companies and management are committed to implementing them. Companies have also become more responsive to shareholder concerns.

  • The governance reforms have resulted in significant changes and should be given time to work.

  • The proposed one-percent threshold for submitting an "opt-in" proposal will be easily met at many companies.

  • They noted that Institutional Shareholder Services (ISS) has its own independence criteria, and that if ISS determines a director is not independent that can result in significant withheld votes.

  • If a triggering event occurs, companies should have an opportunity to respond to shareholder concerns, and the proposed shareholder nomination process should not be triggered if the company cures the problems. They stressed that granting the company a cure option would be helpful.

  • They suggest that formal hearings would be helpful for this debate.

  • Various other technical comments about the mechanics of the proposal.

They indicated that they intended to provide detailed comments through the comment letter process.