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