From: Julie Stetter [juliestetter@hotmail.com]
Sent: Friday, September 05, 2003 5:38 PM
To: rule-comments@sec.gov
Subject: Re: File No. S7-14-03


To: rule-comments@sec.gov

Re: File No. S7-14-03

September 5, 2003

Jonathan G. Katz, Secretary
U.S. Securities and Exchange Commission
450 Fifth Street NW
Washington, DC 20549-0609

COMMENT ON SEC-PROPOSED RULE: NOMINATING COMMITTEE DISCLOSURES AND PROCESS 
and COMMUNICATIONS BETWEEN SHAREOWNERS AND CORPORATE DIRECTORS

Dear Mr. Katz,

I submit the following comments regarding Nominating Committee policies and 
disclosures for Board nominations, and greater vehicles for shareholders to 
communicate directly with Board members (SEC-proposed rule S7-14-03). This 
is a thoughtful step in tackling Directors' lack of accountability and 
obligation to shareholders, but a step I hope will lead to even more robust 
discussions of shareholder democracy and investor access to the corporate 
proxy statement.

Investor-proposed nominees are rarely given consideration by management 
during the nominations process. Shareowners therefore rely on expensive and 
time-consuming proxy contests to bring attention to their candidates, who 
often lose in contested elections because management spends shareholder 
assets to oppose such investor nominees. While greater disclosure of the 
criteria and processes for nominating Board candidates will be quite useful 
to investors, it may be difficult for the SEC to eliminate boilerplate 
disclosures by Board members. The SEC should also not mistake the tide of 
letters in support of greater disclosure and communication channels with 
board members as a sign that shareholder access is not needed by 
shareowners, for it is the crucial missing link in Board accountability and 
strong governance at most corporations.

Nominating Committee Disclosures
I fully support the recommendations that Nominating Committees disclose when 
they receive nominations from security holders, as well as the procedures 
for nominating candidates for the Board. I also support detailed disclosures 
regarding the qualifications of, and criteria for, Board candidates, 
including those suggested by investors. I would also like to see diversity 
of the Board as part of the criteria for consideration, and a description of 
how each candidate meets independence requirements outlined by the stock 
exchange listing reforms. I further support transparency of the nominators 
behind candidate for the Board, including those proposed by shareholders and 
Board search firms. This information is quite useful to investors in 
determining conflicts of interest and the measure of independence Board 
candidates have from management, other Directors, and the company itself.


Shareholder Communications with Board Members
It is well-known that Board members rarely respond to communications from 
shareowners. Calls, letters and emails are often routed through Investor 
Relations or corporate executives, who often decide to filter such 
correspondence. Such procedures do not uphold the basic premise that Board 
members directly represent shareholders. The channel of communication 
between security holders and Boards should be quite clear, and easily 
accessible -- not buried 20 pages into a corporate web site. Just as the 
revised NYSE listing standards proposed direct channels for communicating 
with Audit Committees, should there be a problem, investors should have 
direct access -- via emails, phone numbers, faxes, and addresses -- to the 
Board members representing them.

I additionally support the proposal of Boards reporting back to shareholders 
a summary of shareholder communications with Directors, actions taken in 
response to those concerns, and if the Board did not respond to particular 
communications, which executives did and why.

I would also like to see a summary report in the proxy statement of Director 
attendance at annual meetings, for I'd like to know which Board members are 
forgoing their duty of representing shareholders, and addressing their 
questions, at such meetings.

The proposed disclosures, while paving critical improvements to the 
transparency of corporate elections, are not enough to restore lost 
confidence in U.S. equity markets. It will be the combination of greater 
transparency and greater investor access to the proxy that will strengthen 
shareholder democracy, and Board accountability with it.


Sincerely,

Julie Stetter
36 Clarke St. #5
Burlington, VT 05401

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