National Association of State Treasurers
June 13, 2003
Mr. Jonathan G. Katz
Re: S7-10-03 Review of Proxy Rules and Regulation
Dear Secretary Katz:
I write on behalf of the National Association of State Treasurers in support of a comprehensive review of the Securities and Exchange Commission's proxy rules and regulations. As the elected chief financial officers of the states, the state treasurers directly manage trillions of dollars in state funds. The treasurers are important daily participants in the domestic securities markets, investing trillions of state funds in U.S. corporations and small businesses. Most of the treasurers function in a fiduciary capacity by serving on public pension and other public investment boards. The state treasurers are in the forefront in addressing concerns about corporate business practices and governance, leading efforts to ensure investor confidence in the stock markets and to increase shareholder value.
The National Association of State Treasurers believes the Commission should undertake a comprehensive review of the current proxy regulations. This review should include the consideration of proposals to ensure that investors have a meaningful role in the governance of the companies held in investment portfolios. Investors should have a fair and equal opportunity to nominate candidates for board directorships. We believe that fair and equal opportunity for representation is one of the most powerful and meaningful methods by which the interests of management and the interests of owners can be aligned.
Governance, which allows shareholders fair and equal access to corporate proxy cards for the nomination of directors, ensures corporate managers will become more accountable to the beneficial owners of these public companies. This is the essence of protecting the interest of investors and maintaining the integrity of the securities markets upon which more and more individuals depend for their financial security.
The National Association of State Treasurers has recently established a special committee on corporate governance. The Committee is currently undertaking a broad based review of corporate governance matters, including the proxy process, and would like to work with the Commission as it reviews and develops changes to the proxy regulations.