June 10, 2003
Mr. Jonathan G. Katz
Re: File No. S7-10-03
Dear Mr. Katz:
On behalf of the International Union, UAW, our union's membership, and the participants in our pension plans, I am writing to support the Security and Exchange Commission's Division of Corporation Finance in its proxy rule reform project. We commend the Commission for its initiative to broadly examine the rules that affect shareholders' ability to oversee companies. Chairman Donaldson has stated that the time has come to ensure that proxy rules and regulations "are serving the best interests of today's investors, while at the same time, fostering sound corporate governance and transparent business practices." We agree.
Proxy rules and regulations should serve the welfare of shareholders. Owners ought to be given the right to choose individuals to oversee companies on their behalf. Allowing shareholder access to proxy cards, for the purpose of nominating candidates to run for seats on corporate boards, is the best way to ensure investors a meaningful say in corporate governance.
We also encourage the adoption of proposed rules to facilitate easier inclusion of shareholder proposals in proxy statements. The current array of exceptions that companies can invoke to exclude investor initiatives, combined with the obstacle of requiring the proposing shareholder to attend the annual meeting, only serves to stifle the legitimate voice of a company's long-term institutional owners. Removal of the current barriers will do much to level the playing field between shareholders and corporate insiders.
We want to commend the Commission for the recent passage of final rules requiring Investment Advisers and Registered Management Investment Companies to provide disclosure about how they vote proxies. Further expansion of the rules requiring proxy disclosure will do even more to ensure transparency from the inner workings of the boardroom to the shareholders represented. In fact, directors who evidence their commitment to shareholder interests, as demonstrated by the proxy votes that they cast, will undoubtedly welcome increased amounts of transparency.
Purposeful reforms, designed to enhance shareholders' role in the governance of the companies they own, are past due. We encourage changes in this direction.
Thank you for the opportunity to comment.
cc: William H. Donaldson, SEC Chairman