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American Society of Corporate Secretaries September 10, 2003 Jonathan Katz
Dear Mr. Katz: This letter is being submitted on behalf of the American Society of Corporate Secretaries, an organization whose nearly 4,000 members have a significant amount of collective practical experience in the area of corporate governance. We appreciate the opportunity to express our views regarding possible changes to the proxy disclosure rules related to nominating committee functions and communications between shareholders and boards of directors. In our comment letter dated June 13, 2003, we stated that the Society has been a strong supporter of the recent initiatives by the stock exchanges to bolster the independence and effectiveness of nominating committees. We also stated that additional listing standards and disclosure requirements that improve the transparency of the nomination process might be beneficial. We note that many of the Society's suggestions regarding possible disclosure requirements are contained in the Release. We would offer the following comment on the proposals. The Release states that the issuer must identify the specific individual who recommended a candidate who is being nominated for election in the proxy statement. We believe that requiring disclosure of the name of each individual who recommended a candidate would have a significant chilling effect on the search process. If the Commission strongly believes that the source of a candidate is material to investors, then we suggest that disclosure regarding the position of the individual who made the recommendation - i.e., member of senior management, board member, search consultant, etc. should suffice. We appreciate the opportunity to comment on this important issue and offer our assistance as the Commission continues its analysis.
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