Re: File No. S7-14-03
September 4, 2003
Jonathan G. Katz, Secretary
COMMENT ON SEC-PROPOSED RULE: NOMINATING COMMITTEE DISCLOSURES & COMMUNICATIONS BETWEEN SHAREOWNERS AND CORPORATE DIRECTORS
Dear Mr. Katz,
I am submitting comments on behalf of The General Board of Pension and Health Benefits of the United Methodist Church (The General Board), a non-profit, administrative general agency of the United Methodist Church. The General Board is responsible for the general supervision and administration of pension, disability, death and health benefit plans for more than 66,000 clergy and lay employees of the Church and manages and invests over $10 billion dollars in assets.
The General Board believes in the importance of being an informed, involved and active investor. As such, we have been involved in extensive dialogue with companies on social, environmental and corporate governance issues and have been the sponsor and co-sponsor of a number of shareowner resolutions on these topics. We have a deep interest in the Proposed Rule the SEC has submitted for public comment and believe these rule changes will serve to strengthen Directors' accountability to shareholders.
Nominating Committee Disclosures
The General Board values and advocates for diversity on corporate boards. In keeping with the Social Principles of the Church, we have joined with other institutional investors filing shareholder resolutions that have received reasonably high levels of shareholder support, most recently in 2002, at Bed Bath & Beyond and EMC, which received 19.9% and 32% of the votes cast, respectively.
We therefore recommend that the Nominating Committee be required to disclose if and how they take the issue of diversity, including diversity of gender and race, into account in presenting the slate of Directors and selecting New Directors.
Shareholder Communications with Board Members
We agree that there should be clear procedures described for a security holder to communicate with Board Committees or Board members. Companies like Pfizer have already set up a solid process for such communication with their outside directors including an email box. Since outside Directors are responsible for Committees like the Audit and Corporate Governance Committees, it seems vitally important to be able to communicate with those Committees directly.
We therefore support the proposal stating that there be a description of how security holders can communicate with the Board and the Board Committees, and action the Board took in response to such input.
The General Board supports rule changes that will strengthen shareholder democracy and Board accountability. We further urge the Commission to require disclosure of efforts undertaken by nominating committees to increase the representation of women and persons of color on corporate boards.