Release No. 33-8138/Definition of "Financial Expert"
From: McGill, Len [len.mcgill@fleetwood.com]
Sent: Wednesday, November 20, 2002 10:41 PM
To: 'rule-comments@sec.gov'
Subject: Release No. 33-8138/Definition of "Financial Expert" (s7-40-02)

  We agree with the concept that a public company should have a financial expert 
serving on its audit committee.  Given the logistical pressures on Boards today, 
however, we applaud the Staff's recognition in Release No. 33-8138 that a person, 
while never having qualified as an accountant or having served as a chief financial 
officer, may have had experience in a position that resulted in the person acquiring 
similar expertise.  The burden remains on the Board, however, to make that judgment, 
and we would recommend only that the Staff make a further and stronger statement to 
the effect that a person who has served as the chief executive of a public company 
should, in the ordinary case, be deemed to have such equivalent expertise. This 
would greatly enhance the pool of qualified candidates, and greatly relieve the 
pressure on those companies that are faced with major restructurings of their Boards 
of Directors, while in our view continuing to require an appropriately high standard 
of financial expertise.

  Responsible companies are buffeted today by competing demands.  Many institutional 
investors, quite properly, insist on diversity among Board members.  Thus, many 
companies are facing the prospect of attempting to restructure their Board composition 
from a new and untapped pool of candidates, which in normal times would be an exciting 
challenge but in the current environment is one additional point of stress for 
well-intentioned organizations. And when companies need to add a "financial expert" 
at the same time that they are trying in good faith to bring diversity to their Board,
the reality is that one goal or the other, or both, will be short-changed.  

  Further, the New York Stock Exchange (on which our stock is listed) will soon 
require that a majority of directors must be independent, and that all of the members 
of the audit, compensation and governance committees must be independent.  Again, this 
is good rule, but it places additional burdens on those independent directors, who are 
called into service on more committees where independence is mandatory.

  Similarly, institutions are recommending relatively smaller Board sizes (10-12 members 
is often now regarded as optimum).  This further increases the workload on the remaining
directors.  Other institutions, including the NYSE, are requiring more committees.  For 
example, we all now need to have a Governance and Nominating Committee, which performs 
functions that in many companies were formerly divided among other existing committees.  
Extra committees means additional assignments for directors.  For the audit committee 
itself, Sarbanes-Oxley significantly increases the responsibilities of, and demands on, 
the members of that committee, to the point where Board members may be reluctant to serve 
on the committee.  

  The sum of this is that companies are now extremely limited in terms of which of their
directors can be slotted into which seats.  To mandate that each public company must, in 
effect, find a CPA or a CFO, of whom there is a limited pool, and must then place that 
CPA or CFO to sit on the committee where the burdens and, it may be fair to say, the 
potential exposure are greatest, is to place well-intentioned organizations in considerable
jeopardy of being unable to satisfy all the competing demands all at once.  Which leads 
us to our observation that while the goal of requiring a "financial expert" is laudable, 
some further flexibility in the definition might be desirable, even if only in the 
immediate term whilst companies reorganize their Boards in a prudent and orderly fashion.  

  Leonard J. McGill 
  VP and Deputy General Counsel 
  Fleetwood Enterprises, Inc. 
  3125 Myers Street 
  Riverside, CA 92503