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Tell the SEC: We Need Independent Mutual Fund Boards
A recent investigative report shows that mutual funds rubber stamp excessive CEO pay. For years, mutual fund boards have been run by insiders motivated by generating expensive fees and cozying up to companies that buy their lucrative pension products. These mutual funds don’t challenge CEO pay because they don’t want to alienate a business opportunity—no matter what it costs their shareholders.
Act now and send the following message to Securities and Exchange Commission Chairman Christopher Cox. Tell him to support an independent chairperson and independent directors on mutual fund boards.
| Sample Letter for Campaign |
Subject: File Number S7-03-04
Dear [ Decision Maker ] ,
Mutual funds are an increasingly important savings vehicle for tens of millions of working Americans like me. We are the owners of these funds and we bear the risks if they are dominated by self-interested insiders. We look to the Securities and Exchange Commission (SEC) to protect us. I am writing to express my strong support for the proposed rule requiring that mutual fund boards have an independent chairperson and at least 75 percent independent directors. These rules were among the most important reforms adopted by the SEC in the wake of the mutual fund trading and sales abuse scandals.
A recent study by AFSCME and The Corporate Library found mutual funds provide a rubber stamp for excessive management pay, supporting more than three-quarters of all management pay proposals. Ninety percent of institutional investors think the current system overpays executives. We need independent directors to stand up to the excesses of the money managers.
The Investment Company Act requires that mutual funds be managed in the interests of their shareholders. Requiring independent directors and chairpersons will help ensure this safeguard for the small investor, to make sure the little person gets a fair shake.
Sincerely,
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Campaign Launched:
August 10, 2006
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Chances are you’ve got savings or a 401(k) invested in a mutual fund or two. For years, mutual funds boards have been run by insiders who are more interested in generating expensive fees and cozying up to companies that by their lucrative pension products than in protecting your money.
A recent investigative report shows that mutual funds rubber stamp excessive CEO pay. Their boards don’t challenge CEO pay because they don’t want to alienate a business opportunity—no matter what it costs their shareholders.
Now the Securities and Exchange Commission (SEC) is considering rules requiring mutual funds to have independent chairs and boards.
We know we can improve corporate governance by making our voices heard by the SEC. Last month we won new SEC rules requiring corporations to clearly disclose CEO pay packages—revealing a single, catch-all number including CEO golden retirements, perks and stock options. You sent more than 23,000 messages to the SEC, a huge part of the record number of comments on that SEC rule. You can do it again.
Mutual funds are becoming the most important savings vehicle for tens of millions of working families. Our retirement security is in the hands of fund directors who may be more concerned about their fees and corporate relationships. We don’t have to have foxes guarding the henhouses of our savings. The SEC can protect us by requiring mutual funds to be led by an independent chairperson of a board with at least 75 percent of its directors considered independent.
To make your voice heard by the SEC, you must send your message to Chairman Cox soon. The deadline for comments on this important rule is Aug. 21. Please don’t wait another day to urge the SEC to require independent chairs and boards for mutual funds.
With Social Security and employee pensions under attack, we need all the retirement security we can get. Tell SEC Chairman Christopher Cox to protect our savings in mutual funds.
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