The strength of a Board is often its diversity - representatives of corporate America, educators, lawyers, accountants, activists and others who bring opinions and experience relevant to protecting shareholder interests. Boards are expected to protect shareholder interests first and foremost. The proposed rules by the NYSE, AMEX and NASD undermine a Board's responsibility to shareholders. We strongly object to this proposed rule change and hope that the SEC will oppose any change that affects a Board's ability to act independently and in the best interest of shareholders 6. Safe Harbors .
Management is responsible for a company's financial statements.
Increased disclosure about an audit committee's specific responsibilities for the financials may confuse shareholders and change the perception about where the responsibility for the financial statements resides. We believe that safe harbors are necessary to protect the audit committee from frivolous litigation. However, we believe that the type of assurance recommended by this proposal will subject audit committees to the likelihood of litigation that does not exist today. Even if they are subsequently found innocent of any claim, the cost of defense will be substantial. Mutual fund requirements .