Support rules change to give mutual fund owners more power
In the wake of the recent wave of corporate scandals – Enron, WorldCom and Qwest, etc. – investors are angry at corporate America and frightened by the eroding market value of their 401(k) and mutual fund accounts.It is clear that a major cause for the collapse of these companies was the complicity of company directors, accountants, lawyers and bankers with greedy, dishonest management. Those charged with protecting the interests of investors were asleep at the switch.The good news is that there soon may be a way for investors to start protecting their own interests. Many of us own mutual funds as the primary vehicle for achieving our financial goals and investing for retirement. These funds, in turn, own shares in many of the companies that have been making headlines. The managers of these funds vote the shares in their portfolio companies to elect directors, approve auditors and other matters of corporate governance on our behalf.Currently, there is no requirement that mutual fund managers inform us about the criteria used to determine how to vote, or even how they voted.The Securities and Exchange Commission (SEC) is seeking public comment on rule proposals to remedy this situation. Under the proposed rules, mutual funds and investment advisers would be required to disclose the policies and guidelines they follow in casting their votes as well as their actual voting records.This disclosure will allow all of us to know whether the people managing our money are acting in our interests or simply rubber stamping management.The deadline for comments is Dec. 6.The SEC prefers that comments be e-mailed firstname.lastname@example.org.You will find a letter templateon the Web site of the Shareholder Action Network(www.shareholderaction.org), which you can customize quickly and send.If you prefer, mail a hard copy to SEC, 450 Fifth Street NW, Washington, DC 20549-0609. All communications should reference the two rules, File Nos. S7-36-02 and S7-38-02.Why make the effort? It’s your money. You own these companies through your mutual funds. All investors should seriously consider supporting the SEC’s new proxy voting and disclosure rules. The alternative is to sit around and be victimized by one corporate scandal after another. It’s time for investors to get involved and take action.
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