Republic Services, Inc.
110 S.E. 6th Street, Suite 2800
Fort Lauderdale, FL 33301
Via EMail to
December 19, 2003
Mr. Jonathan G. Katz
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: Comments on Security Holder Director Nominations File No. S7-19-03
Dear Mr. Katz:
I am a member of the Board of Directors and Chairman of the Nominating and Corporate Governance Committee of Republic Services, Inc., a Delaware corporation listed on the New York Stock Exchange (NYSE). Our company has $2.5 billion in revenue and more than 12,700 employees in the United States. Over the past several weeks we have been monitoring comments submitted in response to the Securities and Exchange Commission´s (SEC) October 14, 2003 proposal to increase the ability of shareholders to nominate directors through company proxy statements (the Proxy Proposal). Having considered the substance of the Proxy Proposal and the comments published to date, we felt it appropriate to submit our comments on this matter.
At the outset, we want to make it clear that we completely support reforms mandated by the Sarbanes-Oxley Act of 2002 as well as the recently approved corporate governance standards applicable to NYSE and to The NASDAQ Stock Market, Inc. (Nasdaq) listed companies. Taken together, these measures already have and will continue to promote increasingly sound corporate governance, transparent business practices and responsiveness to genuine shareholder concerns. It is important to bear in mind that none of these measures has been fully implemented. Consequently, the full impact of the reforms required by them is not yet known. What we do know, however, is that boards of directors and their committees are more independent and active than ever before and that shareholder-director communication has been significantly enhanced.
While we have numerous concerns with the Proxy Proposal, foremost among them is the likelihood that the advice and oversight provided by strong and independent boards of directors may be compromised. Approval of the Proxy Proposal by the SEC is premature; it is better to wait and determine the full impact of Sarbanes-Oxley and the NYSE and NASDAQ governance standards. At the risk of oversimplification, the duty of directors is a simple one: we are required to exercise our business judgment and to act in a manner that we reasonably believe is in the best interests of a company and its shareholders. Unlike the directors upon whom they rely, shareholders of public companies are unencumbered by this obligation; they are free to act and make decisions purely in their own self-interest, without regard to other shareholders or corporate constituencies. If the Proxy Proposal is approved as proposed, we believe it will present a situation in which active shareholders (e.g., public pension funds, labor unions, etc.) can easily hijack the proxy process and use it to promote their own agendas and goals, likely at the expense of existing shareholders. Not only does this undercut the role of (or altogether bypass) the board of directors and its nominating committee, it creates a gross distortion of the strong governance foundation that Sarbanes-Oxley was intended promote.
Thank you for considering our comments on the Proxy Proposal. Should you have questions or comments regarding any aspect of the foregoing, do not hesitate to contact me directly at (954) 202-8613.
Very truly yours,
Ramon A. Rodriguez