May 8, 2003

Suzanne Suter
Vice President
Corporate Secretary
And Chief Governance Officer
1201 Lake Robbins Drive
The Woodlands, Texas 77380


Mr. Jonathan G. Katz
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C., 20549-0609

Re: Release No. 34-47672, April 11, 2003, Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto by the New York Stock Exchange, Inc. Relating to Corporate Governance, File No. SR-NYSE-2002-33

Dear Mr. Katz:

This comment letter is being submitted on behalf of Anadarko Petroleum Corporation, a New York Stock Exchange ("NYSE") listed company, in response to the request for comments by the Securities and Exchange Commission (the "Commission") to Release No. 34-47672 (the "Release") regarding the NYSE proposed rules on Director Independence Standards.

While we support the NYSE for proposing significant corporate governance reforms, we would like to comment on the proposed bright line test for director independence. Section 303A, 2(b)(iv) of the NYSE proposed rules states that:

"A director who is an executive officer or an employee, or whose immediate family member is an executive officer, of another company (A) that accounts for at least 2% or $1 million , whichever is greater, of the listed company's consolidated gross revenues; or (B) for which the listed company accounts for at least 2% or $1 million, whichever is greater, of such other company's consolidated gross revenues, in each case is not `independent' until five years after falling below such threshold."

We believe that such a commercial relationship entered into in the ordinary course of business is not material to independence until it is at least 5% of consolidated gross revenues of a company. We also believe that the existence of such a relationship should give rise only to a rebuttable presumption of a lack of independence.

We are concerned that this director independence standard federalizes the area of corporate law and erodes the Board of Directors' authority and business judgement unnecessarily.

Elimination of the Bright Line Restriction in Favor of a Rebuttable Presumption

The existence of a commercial relationship between a director's employer and the company should raise only a rebuttable presumption of a lack of independence. The NYSE has already proposed many useful guidelines for director independence that we have adopted. However, we believe this absolute standard is overly restrictive and should be modified.

We suggest that the existence of a defined commercial relationship between a director's employer and the company should constitute only a rebuttable presumption of a lack of independence. The business judgment exercised by the Board regarding the materiality of this relationship is the same as that made regarding other relationships between the company and its directors. The Board should be allowed to make its judgment regarding materiality and to support its decision in the event that a business relationship exceeding 2% (or other percentage) of gross revenues is determined to be immaterial. In the process of supporting its decision regarding materiality, more information is provided about the precise nature of the relationship between the director and the company than is the case if the company simply identifies the director as an interested director.

Raise the Materiality Threshold from 2% to 5%

Alternatively, if it is decided that a bright line test for director independence in light of a commercial relationship is necessary, then we suggest that the NYSE and the Commission consider raising the materiality threshold from 2% to 5% of annual gross revenues. We believe that a 2% is a too low a threshold and that 5% is a preferable figure because:

  1. 5% is often used as a benchmark (although not a definition) of materiality-for example, as a threshold for disclosure in the proxy statement of beneficial ownership and as a threshold for requiring disclosure of relationships under Item 404 of Regulation S-K;

  2. The use of 5% as a threshold is a closer equivalent to the compensation standard provided in the NYSE proposed rules because the money received by the director's employer or paid by the director's employer to the company is paid in exchange for goods or services in the course of business and not to the director as direct compensation. In other words, the benefit to the director from the heightened business relationship is only the indirect value of the profit generated in the commercial transaction for his or her employer;

  3. The point of view of a supplier as a director of the company is valuable to the Board of Directors because the knowledge and expertise of those in the oil and gas service industry understand the unique nature and problems of our industry.

  4. The NASD has proposed a 5% threshold, and this standard should be consistent from one exchange to another.


We support the NYSE's efforts to improve the corporate governance systems of listed companies, and we have energetically adopted the required and suggested improvements in our company's corporate governance. We hope that our suggestions regarding director independence will be considered and used to further improve corporate governance systems while enabling the Board of Directors to continue to make reasonable business judgments on behalf of the corporation.


/s/ Suzanne Suter

Suzanne Suter
Vice President, Corporate Secretary and Chief Governance Officer

cc: The Board of Governors of the New York Stock Exchange