New York, NY, January 23, 2003
DOMINI DECLARES VICTORY ON
MUTUAL FUND PROXY DISCLOSURE
Socially
Responsible Firm Applauds SEC for Ushering In New Era of Transparency
New York – “Concerned investors and the socially responsible
investment community should celebrate. We have won an important victory on
behalf of mutual fund transparency, shareholder rights, and improved corporate governance.”
This was the
reaction of Amy Domini, founder and CEO of Domini Social Investments, when the
Securities and Exchange Commission voted to adopt two rules requiring mutual
funds and investment advisers to disclose their proxy voting policies and
voting records. Domini Social Investments filed a rulemaking petition calling
for this landmark change in mutual fund regulation, and the company has
championed the cause of proxy voting disclosure for a number of years.
“The mutual fund
industry owns approximately 19% of the publicly traded securities in the U.S.,
and casts votes at the annual meetings of these companies on behalf of ninety
million individual investors,” Ms Domini continued. “Until now, these investors
had no way of finding out how their fund managers were voting on critical
issues like executive compensation, board diversity, offshore tax havens and
other issues with broad social and environmental impact. By contrast, corporate
managers have been lobbying hard for passage of their proposals, and only they
have had access to these votes. We have
all seen the tragic results of this system, which has operated in complete
darkness, rife with conflicts of interest.”
“The socially
responsible investment community has led the way on this issue, demonstrating
that SRI firms value transparency and accountability first and foremost. Until now, the only mutual fund managers
that have published both their proxy votes and voting guidelines have been
members of the socially responsible investment industry. ”
In
2001, Domini Social Investments
filed a rulemaking petition calling for this landmark change in regulation. (Petitions were also filed by the AFL-CIO and the
International Brotherhood of Teamsters.) Two years earlier, Domini became the
first mutual fund manager in America to publicly disclose its proxy votes.
Domini has published comprehensive voting guidelines regularly since 1992. (Domini’s current proxy votes and guidelines
are available on its website, www.domini.com).
Following September
19, 2002, when the SEC issued the proposed rules to require disclosure, Domini
mobilized investor and public support for the rules. Domini not only sent its
own comment letter to the SEC but urged its shareholders and other members of
the public to do the same, and enabled supporters to email their comments to
the SEC through the Domini website (www.domini.com).
Domini’s lobbying
effort, undertaken in cooperation with Working Assets, the communications and
credit card company, and Citizen Works, an organization founded by Ralph Nader
that works on corporate reform, generated more than 2,500 investor letters in
support of the proposed rule — the greatest number generated by any investment
firm. The SEC received more than 7,000 letters during the public comment period
— the most for any proposed rule in the SEC’s history. The vast majority of
these letters supported proxy voting disclosure, in the face of vigorous
opposition from the mutual fund industry.
“I applaud the
SEC’s decision,” Ms. Domini said, “and I thank
everyone who helped galvanize investors into writing thousands of letters to
the SEC in support of the new rules — including the AFL-CIO, Calvert,
Pax World, and the Shareholder Action Network.”
“These
rules will make mutual funds and investment advisers more accountable to their
investors. As a result, we believe they will be less likely to rubberstamp
corporate management’s proposals and more likely to take an independent view of
what is in the best interests of shareholders,” added Adam Kanzer, General
Counsel and Director of Shareholder Advocacy at Domini. “In any case, these
rules will enable investors to select those managers who are doing their part
to strengthen corporate governance and hold corporations more accountable.”
“The new rules
aren’t perfect,” said Ms. Domini. “But the importance of this reform cannot be
overstated: The Commission has chosen to act at a critical time. Restoring
confidence in America’s corporate leadership and the integrity of financial
markets requires that corporations be made more accountable to their
shareowners and other stakeholders.
“Proxy voting transparency will protect America’s investors while having
positive effects not only upon corporate governance, but on the social and
environmental performance of corporations whose power and influence — and hence
responsibilities — in our own society and globally have never been greater. We
commend the Commission for taking this bold step.”
About Domini Social
Investments
Domini Social Investments manages more than
$1.3 billion in assets for individual and institutional investors seeking to
create positive change in society by integrating social and environmental
criteria into their investment decisions. Its flagship fund, the Domini Social
Equity Fund (NASDQ: DSEFX), was the first socially and environmentally screened
index fund and is the nation's largest socially responsible index fund. The
Fund seeks to include companies with positive records in community involvement,
the environment, diversity and employee relations, and excludes companies
deriving significant revenues from alcohol, tobacco, gambling, nuclear power,
and weapons contracting. In addition to the Domini Social Equity Fund, the
company also offers the Domini Social Bond Fund (NASDQ: DSBFX) and an
FDIC-insured money market account (in partnership with ShoreBank), both of
which focus on community economic development.
Additional information on Domini
Social Investments is available on the firm’s website, www.domini.com. Domini’s
seventh annual Proxy Voting Guidelines
& Shareholder Activism booklet is also available free of charge by
calling 1-800-225-3863.
The
Domini Funds are subject to market risks and are not insured. You may lose
money. Some of the Domini Social Bond Fund’s community investments may be
unrated and carry greater credit risks than its other investments. Please
obtain a prospectus which contains more information on risks, fees, and
expenses, by calling 1-800-762-6814 or online at www.domini.com. Read it carefully before you invest or send money.
DSIL Investment Services LLC (DSILD), Distributor. The Domini Social Equity
Fund is not affiliated with any bank and is not insured. DSILD and ShoreBank
are not affiliated. 1/03
