March 2, 2017
Dear Chairman Piwowar:
As Managing Partner of Natural Investments, which has managed portfolios of thousands of investors for 30 years, I want to relay that millions of investors fought long and hard for the sorts of consumer protections enabled by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. As such, there is no reason for the rule to be reconsidered when the public interest in this matter is clear. The compliance complaints of companies are irrelevant. This rule, not to mention all of Dodd-Frank, would not have been necessary if companies were more responsible and accountable. Investors who own stock in these companies need to understand, the environmental, social, and governance policies and practices of the companies because such issues are material risks to financial performance. As owners of companies, investors perpetually seek to reduce risks to share price, and for 20 years the research has clearly proven that companies with a greater commitment to responsible labor, human rights, and environmental practices are more profitable than their less evolved peers. How a company is managed, including salary levels, is material to the bottom line, as the value companies place on labor impacts productivity and morale of the labor force.
Companies with governance or compensation problems set off warning lights for investors and threaten the companies' long-term performance. The rule will foster corporate accountability and provide investors with material information to better assess investment risks, and provides clear guidance to companies on some of the effective ways to be profitable.
It is essential that the SEC protect the public interest, not the preferences of corporate management. As such, I urge full support of this and all sections of Dodd-Frank, as they are needed to minimize systemic risks of our economy and to protect long-term share value.