Speech by SEC Chairman:
Opening Statement before Open Commission Meeting
Chairman William H. Donaldson
U.S. Securities and Exchange Commission
Open Commission Meeting
SEC Headquarters, Washington, DC
August 6, 2003
This is an open meeting of the U.S. Securities and Exchange Commission on Wednesday, August 6, 2003.
Today we will consider a recommendation by the Division of Corporation Finance to propose amendments to the Commission's proxy rules. These proposals are the first to come out of the Division's July 15 report on the rules and regulations regarding the nomination and election of directors. The proposals would require more disclosure of public companies' nominating committee processes and specific disclosure of the processes by which shareholders may communicate with the directors of companies in which they invest. These proposals would apply to the proxy statements of registered investment companies in the same way that they apply to other companies.
Today's proposals are just the first steps in addressing the recommendations in the staff's July 15 report we intend to continue our work to improve the proxy process this fall by considering additional proposals regarding enhanced shareholder access to the proxy process for nomination of directors.
The Commission asked the Division to undertake its study to ensure that the proxy rules are serving the best interests of investors and fostering sound corporate governance and transparent business practices. We hope that the proposals we are considering today will provide better information to investors about the way board nominees are identified, evaluated and selected, as well as a better understanding of how shareholders can interact with directors. We also hope that these rules will encourage communication between companies and their investors, and encourage companies and their directors to respond to shareholder concerns.
We look forward to public discussion regarding the important proposals we are considering here today, as well as the rules regarding shareholder access to company proxy material that we expect the Division to recommend this fall.
I would like to thank our staff, especially Alan Beller, Marty Dunn, Lily Cummins and Grace Lee of the Division of Corporation Finance, for their hard work on the Division's important study and, for their timely work on today's recommendations. I also would like to thank all of the others on the staff who played an instrumental role in the study and today's proposal, including the Division of Investment Management, the Office of Economic Analysis and the Office of the General Counsel.
With that, I turn it over to Alan Beller to discuss the proposals.