From: Kent Lion [kent.lion@worldnet.att.net]
Sent: Monday, March 29, 2004 8:08 PM
To: rule-comments@sec.gov
Subject: s7-19-03

In looking at

17 CFR PARTS 240, 249 and 274
[RELEASE NOS. 34-48626; IC-26206; FILE NO. S7-19-03]
RIN 3235-AI93
SECURITY HOLDER DIRECTOR NOMINATIONS

...I see that the deadline for comments has passed; so, I will make just 2 
comments to show my support for this initiative:

1. I support the attempt to make shareholder votes meaningful. Everyone in a 
position of authority in an organization should, as a condition of having that 
authority, have accountability commesurate with that authority. Currently, 
this is not the case. A shareholder currently has essentially nothing to say 
about who is elected to the board of directors, if there is no choice. For 
example, at the very least, if a "nominee" does not receive at least 50% of 
votes cast for that position, the position should not be filled until a 
"nominee" is offered who is acceptable. As far as nominees are concerned, why 
shouldn't insiders and outsiders each be able to offer  one "nominee" for 
every position? The 2 party system works pretty well for the U.S...

2. As ususal, the effort to please a large number of special interest entities 
(i.e., anyone or any group who does not have the best interest of the whole at 
heart), is creating something that will benefit mostly lawyers. You can't 
please everyone, because a large number of interested parties are specifically 
after their own personal, immediate benefit at the expense of the others. The 
people at the top are often not smart enough to recognize their dependence on 
the well-being of everyone associated with the organization. That ignorance is 
self-correcting (e.g., Enron, Worldcom). If a rule cannot be expressed in 5 
minutes, it's probably trying to dictate processes, instead of results. If you 
dictate processes, you will have loopholes. State the desired results and let 
the companies achieve them. If they don't achieve them within a year, tell 
them to try again. After the third failure, do it for them (three strikes, 
you're out). After a few companies, you'll have developed something that works 
in practice; instead of trying to implement something that hasn't been tested. 
You'll also have a lot more boards with an interest in getting it right.

Kent Lion