[14743]
May 23, 2002
TO: BOARD OF GOVERNORS No. 19-02
RE: ICI SUBMISSIONS ON CORPORATE GOVERNANCE AND ACCOUNTING ISSUES
As we discussed at the last Board of Governors meeting, the Institute will express our
support for initiatives arising out of the Enron bankruptcy that would enhance the ability of
fund advisers to manage their funds’ portfolios. The Institute recently filed with the NYSE and
SEC submissions on two such issues. Copies of these submissions are attached and are
summarized below.
First, the Institute submitted a statement to the NYSE Committee on Corporate
Accountability and Listing Standards recommending that shareholders be required to approve
stock option plans that, at a minimum, would grant options to officers or directors or options
that would exceed a specified dilution threshold.
Second, the Institute filed a comment letter with the SEC on its proposal to accelerate the
filings by certain corporate issuers of Forms 10-K and 10-Q. Our letter recommended that the
SEC require all earnings announcements by reporting companies to be filed on Form 8-K, and to
require that these filings include a reconciliation to GAAP. The letter asserts that this would be
a more effective way to close the “gap” that frequently exists between the time pro forma
earnings are released and the time periodic reports are filed with the SEC. We urged the SEC to
adopt our recommendation irrespective of whether or not it shortens the filing deadlines for
Forms 10-K and 10-Q.
Matthew P. Fink
President
Attachment (in .pdf format)