From: yogi@well.com Sent: Thursday, November 28, 2002 11:28 AM To: rule-comments@sec.gov Cc: san@socialinvest.org Subject: FILE NUMBER S7-36-02 and S7-38-02 Re: File Numbers S7-36-02 and S7-38-02 Mr. Jonathan G. Katz, Secretary Securities and Exchange Commission 450 Fifth Street NW, Washington, DC 20549-0609 Dear Secretary Katz: I am writing this form letter in support of the Security and Exchange Commission's recently proposed rules regarding proxy voting guidelines and vote disclosure by mutual funds and investment advisers, File Numbers S7-36-02 and S7-38-02. I congratulate the agency for instituting meaningful disclosure that will surely bolster confidence in the equity markets, and strongly support the recommendations set forth in these proposed rules. Even though this is mostly a form letter, it does add to the support for the above named File Numbers. The greater context is that we human beings are second class citizens to the legal power of corporations. This legal power has been gained over the last 150 years in various Supreme Court cases and in the almost complete removal of state laws restricting the action of corporations. 200 years ago corporations could not own other corporations, give to politics or charity, possess limited liability, and they were not immortal persons. In two absurdities so plain that we, as a society are in denial as to their outrageousness, we now invest in corporations to develop medical technologies that save oour lives from the cancerous effects of pollution, and corporations, fictional entities similar to an imaginary playmate, own patents to our genes. Strategic steps must be taken to provide for our safety as an endangered species, and very often those steps are only what is provided by our government, as influenced by corporate lobbyists. Here, the rules are a major step forward in providing greater transparency to investors whose proxy assets are held in mutual funds or entrusted to investment advisers. The SEC is making a clear statement that proxy voting is a fiduciary duty and should be exercised with the best interests of fund holders in mind. This is consistent with the fiduciary standard already applied to private pension plans under the 1974 Employee Retirement Income Security Act (ERISA). Greater disclosure of proxy-voting policies and practices would pressure fund managers and advisers to refrain from unilateral rubberstamping of management's decisions. The proposed rules would not only help investors identify those funds and advisers that carefully examine proxy proposals before voting on them, but also those who emphasize strong corporate governance or high standards of corporate social responsibility. Engaged proxy voting helps bring increased managerial accountability and social responsibility to many companies, and there is mounting academic evidence that progress on social, environmental, and corporate governance issues is linked to positive, long-term corporate performance. When all mutual funds and investment advisers reveal how they cast proxy votes, enabling shareholders to know what is being done in their name, we can expect corporate governance and accountability to greatly improve. Thank you for the opportunity to comment on the proposed rules. Sincerely,
Jonathan Frieman
yogi@well.com