From: Valerie Heinonen [heinonenv@juno.com] Sent: Wednesday, September 03, 2003 5:54 PM To: rule-comments@sec.gov Subject: S7-14-03 September 3, 2003 Comment on Proposed Rule: Disclosure regarding Nominating Committee functions and comunications between security holders and Board of Directors FILE NO S7-14-03 RELEASE NO 34-48301 IC 26145 Dear Sir or Madam: I am submitting comments on the SEC decision to increase disclosure with respect to corporate Nominating Committees and shareowner access to the Board of Directors on behalf of the Dominican Sisters of Hope. The Dominican Sisters of Hope, Inc. has been an active investor since 1977, participating in corporate dialogues on social, environmental and corporate governance issues and filing shareholder resolutions on these issues. Thus, we are extremely interested in the Proposed Rule the SEC has submitted for public comment. We support the recommendation that requires a company to disclose when it receives nominations from security holders, the procedures for nominating Directors, the process followed after a nomination has been made and minimum qualifications for nominees. Additionally, the Dominican Sisters of Hope strongly recommend that the SEC add to the proposal whether and how the Nominating Committee includes diversity when making recommendations for new Board members. A number of companies disclose this fact in nominating committee charters and reports. We believe diversity in a Board is an important factor in good governance. From experience we know that shareholder resolutions sponsored by religious and other investors have resulted either in policy change and a disclosure of the new policy or the resolution on the proxy received reasonable levels of support. We recommend, therefore, that the Nominating Committee be required to disclose how diversity, including gender and race, is considered when selecting new Directors and presenting the slate of Directors. Disclosure regarding ability of security holders to communicate with Board of Directors We agree that there must be clearly described procedures for a security holder to communicate with Board committees and Board members. Some companies have determined a process for direct communication with outside Directors, including an e-mail box. Since outside Directors are responsible for Committees such as the Audit and Corporate Governance Committees, it is important to be able to communicate with those Committees. Thus we support the proposal stating that there be a description of how security holders may communicate with the Board and the Board Committees and action the Board took in response to such input. Investment Companies The proposal includes applying the new disclosure requirements to investment companies (“funds”). We agree that this proposal would benefit fund security holders in improving nominating process transparency. The disclosure should include a description of who on the nominating committee are “interested persons” under the Investment Company Act. SUMMARY: The Dominican Sisters of Hope, Inc. supports the emphasis of these proposals and efforts to advance good corporate governance. We strongly urge that Board diversity be added to disclosure regarding the Nominating Committee’s role and responsibilities. The Dominican Sisters also wishes to emphasize that these disclosures will truly be meaningful when combined with a second step, which creates the process whereby shareholders may nominate Directors to be placed on the company proxy for a vote. Yours truly, Valerie Heinonen, o.s.u. Valerie Heinonen, o.s.u., Consultant, Corporate Social Responsibility 205 Avenue C, #10E ~ New York, NY 10009 Phone and Fax: 1-212-674-2542 ~ E-mail: heinonenv@juno.com