From: Virginia L. Horner
Sent: May 24, 2006
Subject: File No. S7-03-04

SEC Chairman Christopher Cox

Dear SEC Chairman Cox,

I urge the SEC to require an independent chairperson on mutual fund boards. Too often mutual funds are designed to enrich fund insiders and management. The role of independent directors is critical to ensure the protection of small, individual directors.

A recent study by the American Federation of State, County, and Municipal Employees and the Corporate Library found that mutual funds provide a rubber stamp for excessive management pay, supporting over three-quarters of all management pay proposals.
Ninety percent of institutional investors think the current system overpays executives. Independent directors are needed to stand up to the excesses of the money managers.

The Investment Company Act requires that mutual funds be managed in the interests of their shareholders. Requiring independent directors and chairpersons will help ensure this safeguard for the small investor, to make sure the little person gets a fair shake.

I do not believe directors and chairpersons should be rewarded for bad management. When a mutual fund is not doing well for the average shareholder, directors should be taking a pay cut - not an increase. This issue is endemic in the money industry and needs a strong remedy. Please do not fold under the pressure and allow a small group of money managers to profit at the expense of the larger number of shareholders.