NEWS RELEASE
Committee on Energy and Commerce Democrats
Congressman John D. Dingell, Ranking Member

DONALDSON TO DINGELL: IMPROVED SHAREHOLDER ACCESS TO PROXY NOT DEAD YET

Washington, D.C. – Rep. John D. Dingell (D-Mich), Ranking Member of the House Committee on Energy and Commerce, today released a letter dated March 23, 2005 from Securities and Exchange Commission (SEC) Chairman William H. Donaldson, informing Rep. Dingell that recent SEC staff decisions implementing current Rule 14a-8, the rule that governs shareholder proposals, “do not constitute the Commission’s views on proposed Rule 14a-11,” regarding the inclusion of shareholder director nominees in proxy statements. Chairman Donaldson states that: “I remain committed to finding a resolution to those issues” and that “the Commission will continue to consider whether there is a shareholder access rule that it should adopt.” This letter responds to the February 24, 2005 letter from Reps. Dingell, Diana DeGette (D-Colo), Barney Frank (D-Mass), Carolyn Maloney (D-NY), Edward J. Markey (D-Mass), and Janice Schakowsky (D-Ill), expressing continued support for reform in this area.

In releasing Donaldson’s letter, Dingell said: “I am delighted that the SEC is continuing to work toward an approach that addresses legitimate concerns of both sides of this debate. At the end of the day, however, the case for reform is clear. Investors continue to be hit with a solid barrage of financial frauds and restatement announcements, at the same time that companies are up in arms over the Sarbanes-Oxley requirements that they institute internal controls and have auditors check them. Shareholders ultimately pay the costs of governance problems, defective or nonexistent internal controls, bad audits, and financial fraud, and they should have at least a limited ability to increase the accountability of corporate directors. My colleagues and I will continue to monitor developments on this important investor protection issue.”

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