December
12, 2001
DOMINI SOCIAL INVESTMENTS URGES SEC TO
MANDATE PROXY DISCLOSURE
Socially Responsible Firm Says Mutual Fund Investors Have a Right to Know
New York, NY – Domini Social Investments, manager of the
Domini Social
Equity Fund (NASDQ: DSEFX), the nation's oldest and largest socially responsible
index fund, has sent a letter to the Securities and Exchange Commission (SEC)
urging adoption of a rule requiring all
mutual funds to adopt and publish
proxy-voting policies and to record and publicly disclose their proxy votes.
The letter from Amy Domini to SEC Chairman Harvey L. Pitt states that proxy
voting disclosure "should be
considered a fundamental fiduciary obligation that mutual funds owe to their
shareholders, and should be required as a matter of law."
Two years ago,
Domini Social Investments became the first mutual fund manager in America to
disclose the actual proxy votes it casts for each company in its portfolios.
All proxy votes are published on Domini's website (www.domini.com) along with
the firm's annual proxy voting guidelines, which cover more than ninety
corporate governance, social and environmental issues. "We think our
shareholders have a right to know how we intend to vote their shares on
important issues of corporate governance and social and environmental responsibility,"
says Ms. Domini, the firm's founder and a managing principal.
In her letter to
the SEC Chairman, Ms. Domini commends the SEC on its recent efforts to
encourage greater disclosure and transparency by mutual funds, including the
plain English prospectus and detailed disclosure requirements regarding
investment strategies, risks and
fees.
"Disclosure [of proxy voting] would promote accountability and
transparency," writes Domini, "which are not only guiding principles
of our financial regulatory system but have been special concerns of the
Commission in recent years."
"I can think
of no other instance where the Commission countenances opacity rather than
transparency in the discharge of fiduciary obligations," continues Domini.
"Indeed, when it comes to proxy voting there is not even a record-keeping
requirement, let alone a disclosure
requirement. I
believe it is time to address this anomaly."
Ms. Domini notes in
her letter that proxy votes have helped convince companies to change their
policies toward apartheid in South Africa and to be responsive on other social
and environmental issues. "Proxy voting is the most direct means by which
individual investors – either directly or through financial intermediaries like
mutual funds – can play an active role in influencing corporate behavior,"
says Ms. Domini.
Ms. Domini's letter
also points out that "there is mounting evidence that progress on social,
environmental and corporate governance issues is linked to long-term corporate
performance."
"The
Commission need not embrace the notion that proxy voting on social,
environmental or corporate governance issues positively impacts fund value or
corporate financial performance in order to acknowledge that many investors
surely believe that it does," writes Domini. "And if this is true,
then they should be entitled to this information - just as they are entitled to
information on mutual fund strategies, risks and fees."
"Proxy voting
disclosure will provide the information that mutual fund investors need to
ensure that their mutual funds are accurately representing their interests when
they vote on corporate governance, social and environmental issues,"
concludes Ms. Domini. "I would urge the Commission to propose for adoption
a rule requiring all mutual funds to adopt and publish proxy-voting policies
and to record and publicly disclose their proxy votes."
Domini Social Investments manages more than $1.5 billion in
assets for individual and institutional investors seeking to create positive
change by integrating social and environmental values into their investment
decisions. Its flagship fund, the Domini Social Equity Fund, was the first
socially and environmentally screened index fund and is the nation's largest
socially responsible index fund. The Fund includes 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.
The
Domini Social Equity Fund and the Domini Social Bond Fund 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
the Fund's other investments.
Please
obtain a prospectus 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.
Domini
Social Investments, Domini Social Equity Fund, Domini Social Bond Fund and
Domini Money Market Account are registered service marks of Domini Social
Investments LLC. 12/01
