August 29, 2009
August 28, 2009 Andrew H. Dral
SEC Headquarters
100 F Street N.E.
Washington, DC 20549
Dear SEC Chairman Mary Schapiro,
In theory, our business texts tell us that shareholders own the corporation. The corporate board of directors works for the interests of the shareholders. Decisions by the board benefit shareholders. Like, so many other fallacies in our society, this is a blatant lie. As corporate boards across our land prove every day, the board of directors works for the interests of management. They promote unwarranted -- out of sight -- management salaries. Its members maintain their status by being docile puppy dogs, and they remain on the board at the pleasure of management. In other words, the current boards are lackeys and lapdogs for management. The crisis in corporate America orchestrated by overly aggressive, unethical, greedy, and corrupt management teams at Enron, WorldCom, Tyco, AIG, Bear Stearns, Lehman Brothers, Washington Mutual, and Adelphia could have been avoided with boards that were engaged in the operation and long-term value of the business.
The proxy access rule – the rights of shareholders to nominate directors -- is long over due. Shareholders need a means to take ownership of the corporate board, because shareholders are the owners, the rightful owners. The board must work for shareholders. Under the current system it doesnt. Shareholders arent dissidents, they are the owners, so the company must avail themselves to provide the ease, funding, and assistance, so an opposing board gets a fair evaluation before the proxy vote. Mailing fees should be paid for by the company, because the owners have every right to make this request. Management has to work for the shareholders, the only way thats going to happen is when the shareholders have more say over the selection of the board members. Shareholders arent interfering with the business, they are exercising their ownership rights.
Access to the proxy process should be kept simple and easy. Shareholders holding only 1% of shares should be a sufficient amount to initiate voting access to alternative board members, with no time requirement on the holding period of shares or limit on how many board seats are nominated – the entire board. The entire 100% of the board must be replaceable, not just 25% of board members. The 1% of shares should be applicable to a group of shareholders, an aggregate, or a single shareholder.
Lets bring accountability and responsiveness to the board room, please do not give-in to the Chamber of Commerce and corporations. Please, pass proxy access, the rights of shareholders to nominate directors, with minimal requirements on percent of share ownership and maximum – 100% -- board member turnover. The board of directors must work for shareholders, not as lackeys for management.
Sincerely,
Andrew H. Dral