From: Edward Dijeau
SEC Chairman Christopher Cox
Dear SEC Chairman Cox,
Mutual funds are an increasingly important savings vehicle for tens of millions of working Americans like me. We are the owners of these funds and we bear the risks if they are dominated by self-interested insiders. We look to the Securities and Exchange Commission (SEC) to protect us. I am writing to express my strong support for the proposed rule requiring that mutual fund boards have an independent chairperson and at least 75 percent independent directors. These rules were among the most important reforms adopted by the SEC in the wake of the mutual fund trading and sales abuse scandals.
A recent study by AFSCME and The Corporate Library found mutual funds provide an additional rubber stamp for excessive management pay, supporting more than three-quarters of all management pay proposals proposed by the company boards.
Ninety percent of institutional investors think the current system overpays executives, yet, they don't have the time to go to the Companies they own Share holers meetings. We need independent directors to stand up to the excesses of the money managers, powerfull executives and "Rubber Stamp" Company Boards and go to thes meeting and vote the interests the share holder(s).
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 both the Large and small investor, to make sure the little person and pensioners gets a fair shake.
Pension plans can own Millions of shares in some of these Mutual Funds yet they can not vote at any of the indevidual "STOCKS" Stock holder meetings because they own shares of the "Mutual Fund" not the companies there pensioners invest in thru the mutual fund. This means the Mutual Fund must VOTE the Stocks to protect the pensioners interest yet most do not. Most just BUY, HOLD THEN SELL stocks in their porfolios without ever doing anything more than filling out a PROX form.
With more and more companies and/or Unions intrusting a Mutual Fund rather than an Investment Trust with their responsability to protect Pensioners Funds, It makes sense that Each and every Mutual Fund have an Independant Board who's resposability is to VOTE at the Stock Holders Meetings of the companies who's stock they hold for their investors. It is their responsability to make sure that all the profits don't go to a few gready people at the top of the Publicley Owned Company but is distributed fairly betwean the stock holders and all the persons making the Company Profitable. Rewarding GOOD decisions that help all to profit and witholding rewards to those who make poor or bad Business decisions. The Stock Option Fiasco would not had happened if there was this oversite by Mutual Funds because they would have caught it back when it first came up at the Annual Stock holders meetings and had read the Companies Stock option balance sheets. They would have Questioned the "Special Treatment" some were getting.
This independant board does more to enpower a Mutual Fund than to restrict it because they can use this board to boost all share holders gains and keep a Companies from managment abuses and violating SEC rules.