12.17.2002 ET

(CSRwire) New York - Amy Domini, founder and CEO of Domini Social Investments, today called on the Securities and Exchange Commission to respond to overwhelming investor sentiment by taking swift action to pass two proposed rules designed to strengthen investor oversight of corporate
practices.

The SEC's proposed rules would require mutual funds and investment advisers to disclose their guidelines and procedures for casting proxy votes, as well as their actual voting records.

"Proxy voting disclosure is a key element in the fight to bring about serious corporate reform," said Ms. Domini. "For the first time, mutual fund investors will be able to identify those fund managers who are doing their part to encourage greater corporate accountability, and those who simply rubberstamp management.

"Mutual fund firms often depend on corporations they invest in for business, including participation in 401(k) plans. This inherent conflict of interest makes it even more imperative that proxy votes be exercised with openness and transparency. As Justice Brandeis famously said, 'sunlight is the best disinfectant.' The SEC should side with ordinary investors on this issue, rather than with those large mutual fund firms that would prefer to keep the curtains drawn.

"Investors have spoken. We strongly encourage the SEC to adopt these rules expeditiously."

More than 2,500 investors submitted comment letters in response to an alert publicized by Domini Social Investments -- the most responses generated by any investment company. Domini's initiative was undertaken in cooperation with Working Assets, the progressive communications and credit card company, and Citizen Works, an organization founded by Ralph Nader that works on corporate reform.

"We would like to thank everyone in the socially responsible investing community who helped raise investor awareness about this important reform," said Ms. Domini. "In addition to the 2,500 letters we generated, the AFL-CIO, Calvert, Pax World, the Shareholder Action Network, and others are responsible for thousands of letters sent to the SEC in support of the new rules."

The public comment period for the two rules ended on December 6, 2002. Paul Roye, Director of the SEC's Division of Investment Management, stated at a December 9 conference sponsored by the Investment Company Institute that the Commission had received approximately 7,500 comment letters, the most comment letters received on a mutual fund rule proposal in recent memory. The overwhelming majority of comment letters registered strong support for the rules,
with only a handful of letters in opposition.

The two rules -- "Disclosure of Proxy Voting Policies and Proxy Voting Records by Registered Management Investment Companies" (file number S7-36-02) and "Proxy Voting by Investment Advisers" (file number S7-38-02) -- were prompted by a rulemaking petition filed by Domini in December 2001, as well as rulemaking petitions filed by the AFL-CIO and the International Brotherhood of Teamsters. In 1999, Domini Social Investments became the first mutual fund company in America to publish its proxy votes. The firm has regularly published its proxy voting guidelines since 1992. While strongly supporting the rules, particularly the requirement that actual voting records be disclosed, Domini Social Investments has recommended that the SEC strengthen the rules by requiring that mutual funds make proxy voting information available online, that proxy voting guidelines include minimum requirements for general categories of disclosure, and that proxy voting disclosure by mutual funds and registered investment advisers be made consistent.

"There are many in the mutual fund industry who are arguing that mutual fund investors are not interested in proxy voting," said Adam Kanzer, Domini's Director of Shareholder Advocacy. "Today we have further evidence that this assertion is simply not true. We're delighted that so many people have recognized the importance of this issue, and we feel confident that the strong support the SEC has received will help ensure the rules are adopted.

"The system that provides for investor oversight of corporate practices has not been working properly. Some of the largest investors in the world -- investment advisers and mutual fund firms -- are voting without any accountability to their investors or to the SEC. These rules will change all of that. These rules will allow the checks and balances that are built into this system to work."

The text of the rules is published in the Federal Register and is available on the SEC's website at www.sec.gov. The SEC has also posted all electronically submitted comment letters to its website. Domini's comment letter is available on its website at www.domini.com/common/pdf/SEC_Proxy_Rule_Letter.pdf.