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December 22, 2003

By email — rule-comments@sec.gov

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

Re: Security Holder Director Nominations (SEC File No. S7-19-03)

Dear Mr. Katz:

We submit the following comments in response to the Commission's proposal to give security holder-nominated director candidates access to company proxy statements in certain circumstances, as outlined in Release 34-48626 dated October 14, 2003.

We urge the Commission not to adopt the proposed rules, or alternatively, to defer adoption of such rules until (a) other recent corporate governance initiatives can be fully implemented and their effectiveness can be fully assessed and (b) the potential unintended consequences of such rules can be fully explored and understood.

As a newly-public company, our Board, and our Nominating & Governance Committee, have spent a great deal of time considering and implementing our governance structure, the key elements of which are described at our governance site at www.accenture.com /governance. We fully supported the Sarbanes-Oxley Act of 2002 and the Commission various rule-making initiatives thereunder (indeed, our CFO and I voluntarily certified our financial statements in 2002 before being required to do so). We also fully support the new governance requirements of the NYSE listing standards and are implementing them (even though we could avail ourselves of an exception from the requirements for a majority of independent directors and the requirements related to composition of Board committees). We have also, in our proxy statement to be sent to our shareholders shortly, attempted to fully comply with the recently effective rules on "Disclosure Regarding Nominating Committee Functions and Communications Between Security Holders and Boards of Directors" (even though we are mailing before the effective date of the new rule).

We believe all of these important new laws and regulations should be given an opportunity to work — as we believe they will — before undertaking dramatic further changes, with significant potential risks of unintended consequences, as those proposed in Release 34-48626. The large number and complexity of the questions in the release are sure indicators of the critical nature of these issues and the risk of "getting it wrong", despite the best of intentions.

I would also note that we have open and frequent communication with our institutional shareholders, and we describe in our proxy statement and at our website, how any of our shareholders may suggest director candidates to our Nominating & Governance Committee. We do believe it is critical, however, that the Nominating & Governance Committee, now comprised of only independent directors, exercise the diligence and judgment needed to assure a board that has the mix of skills, experience, judgment, independence, reputation and diversity (on many different dimensions) that is in the best interests of the company, its shareholders and all its stakeholders.

We share many of the concerns articulated by other thoughtful commenters, but wanted to highlight some of most concern to us. Among the areas of greatest concern to us are:

1. Undermining the Nominating & Governance Committee — We agree with the emphasis the NYSE listing standards place on the role and independence of this committee, especially in the area of determining the optimal composition of the Board (size, skill sets required, etc.) and who the individuals to be nominated to the shareholders should be. Our governance guidelines describe the desired composition of the Board and the balance implicit in that composition could be disrupted by implementation of the proposal.
    
2. Two classes of registrants — In its attempt to give appropriate deference to differing state laws (and presumably the laws of non-U.S. jurisdictions in which some registrants, like us, are incorporated), the proposal appears to create two classes of companies with respect to important shareholders rights. Even if this did not create incentives for state legislatures to change their laws or for companies to reincorporate in other jurisdictions, perpetuation of such a dual-class system does not seem like good policy.
    
3. Two classes of shareholders — Likewise, we are concerned by the prospect of certain shareholders having a materially different set of rights with respect to governance, which could in turn create pressures on management to, consciously or unconsciously, cater to the interests of specific shareholders rather than act in the best interests of the company and all shareholders.
    
4. Chilling effect on Board evaluations — One of the important functions of a Board (confirmed in the new NYSE listing standards) is self-assessment of the Board and its members. We would be concerned by any incentive to hold certain directors to a different standard of performance than others simply because of how they came to the Board.
    
5. Potential for fragmentation of board — We are very concerned about the potential for undermining the collegiality, mutual respect, openness and candor, and common interests that are so critical to the effective functioning of a Board by the introduction of directors who believe they represent (or are perceived as representing) a special interest. Confidentiality of Board deliberations is also critical, and could be put at risk if directors are seen as responsible to the shareholder(s) who nominated them. We are in a transition period from our prior private partnership structure to corporate structure, in which our partners have the right to nominate potential board members. In designing this structure, we made sure that the Nominating & Governance Committee and the full Board retained final decision-making on all potential nominees consistent with their fiduciary responsibilities and, in any event, we planned a phase-out of these rights which will be completed within two years.
    
6. Reputation of Board members — Rightly or wrongly, the reputation of a company's Board members reflect directly on the company. As part of our process of identifying potential candidates for nomination, we do in-depth due diligence and assessment of not only the individual but all organizations with which they are associated. This effort to protect the reputation of the company could be undermined by implementation of the proposal. The prospect of having to publicly address reputational concerns with respect to a shareholder-nominated candidate (or even worse, accepting a board member who puts the reputation of the company at risk for fear of alienating a significant shareholder), rather than dealing with it privately in a committee assessment, is not in the best interests of the company.
    
7. 7. Qualifications of Board members — In assessing the composition of the Board, the Nominating & Governance Committee must be mindful of the desired qualifications of members (whether mandated ones like "financial literacy," "financial expert" status or independence, or desired ones like geographic balance, industry or functional experience, diversity, or other factors). It is also unclear how the Board policies on minimum share holdings, term limits and retirement age might be compromised. With a smaller board especially, one could even imagine situations where a company can become out of compliance with listing standards or SEC rules as a result of a shareholder-nominated director replacing one the Nominating & Governance Committee had chosen for specific qualifications.

Whether one accepts a "shareholder democracy" metaphor or not in thinking about these issues, it may be instructive to consider the current, grave financial difficulties of the State of California. One reason for the current situation is an unintended consequence of the direct access to the ballot through the initiative process — a legislature whose hands were largely tied in addressing budget problems because so much spending is mandated by voter-approved initiatives and therefore outside the control of the legislature which is elected to represent the interests of all citizens. While the analogy is not perfect, we would also be concerned that an unintended consequence of the Commission's proposal here is a Nominating & Governance Committee and a full Board whose ability to perform its critical roles on behalf of the company and all shareholders would be undermined. Such a result would frankly un-do all that Sarbanes-Oxley, the NYSE listing standards and other important initiatives were designed to accomplish.

We appreciate the opportunity to share our concerns with the Commission and stand ready to elaborate on any of them or discuss them further.

Very truly yours,

/s/ Joe W. Forehand

Joe W. Forehand
Chairman and CEO