30% Of Outside Loblaw Shareholders Vote In Favor Of Appointing An Independent Board Chair

Toronto/Fraser Valley/Vancouver – MAY 3 UPDATE –  At the Loblaw Loblaw Companies Limited’s Annual General Meeting of shareholders Thursday, 30% of outside shareholders backed a resolution calling for the adoption of an independent board chair to address issues of public transparency and accountability.

The shareholder resolution, submitted by SumOfUs, an international consumer group, on behalf of the British Columbia Government and Service Employees Union (BCGEU), argued that an independent Chair of the Board would be better able to oversee the executives of the company, improve corporate governance and set a more accountable, pro-shareholder agenda.

Lisa Lindsley, Capital Markets Advisor for SumOfUs responded to today’s shareholder vote saying:

“There is a clear conflict of interest when a corporation’s board of directors, which is responsible for overseeing the CEO and representing shareholders is chaired by that same CEO. Today, Loblaw’s outside shareholders sent a clear signal that an independent board chair is a necessary first step to putting the company’s  board on the path to effective representation of the interests of all shareholders.”

BCGEU president Stephanie Smith added:

“The creation of an independent Board Chair is a critical step in improving corporate accountability at Loblaws that will give us greater confidence in our investment.”

MAY 2 ORIGINAL STORY – On Thursday, May 3rd, at Loblaw Companies Limited’s Annual General Meeting of shareholders, Emma Pullman, Lead Campaign Strategist for SumOfUs, an international corporate watchdog, will present a shareholder resolution calling for the separation of the role of CEO and chair of the board, to create an independent Board Chair. The shareholder proposal comes in collaboration between SumOfUs and the British Columbia Government and Service Employees’ Union (BCGEU), which owns shares in Loblaw.

Loblaws owns President’s Choice and Real Canadian Superstore.

Loblaw’s Chief Executive Officer (CEO) Galen G. Weston also currently serves as Chair of the Board. SumOfUs argues that an independent Chair of the Board would be better able to oversee the executives of the company, improve corporate governance and set a more accountable, pro-shareholder agenda.

VIEW THE SHAREHOLDER PROPOSAL HERE: https://s3.amazonaws.com/s3.sumofus.org/images/Loblaw_2018_ind_chair_proposal.docx.pdf

In addition to presenting the shareholder resolution, Pullman will also deliver a petition signed by nearly 14,000 SumOfUs members in Canada demanding that the company drop its identification requirements and properly handle the price-fixing scheme. This includes 10,000 customers and hundreds of shareholders.

Ahead of Loblaw Companies Limited’s annual general meeting of shareholders, renowned proxy advisory firm, Glass Lewis has come out in support of a shareholder resolution calling for the company to appoint an independent board chair.  In a 2016 report, Glass Lewis explained that:

“…Shareholders are better served when the board is led by an independent chairman who we believe is better able to oversee the executives of the Company and set a pro-shareholder agenda without the management conflicts that exist when a CEO or other executive also serves as chairman.”

An independent Board Chair has been found in academic studies to improve the performance of public companies.  Separating the roles of Chair and CEO is the norm in Europe, and 70% of Canada’s 100 largest companies had board chairs who were not the CEO in 2017, according to the Canadian Spencer Stuart Board Index.

“There is a clear conflict of interest when a corporation’s board of directors, which is responsible for overseeing the CEO and representing shareholders, is chaired by that same CEO,” explained Emma Pullman, Lead Campaign Strategist for SumOfUs. “An independent board chair is a necessary first step to put Loblaw’s board on the path to effective representation of the interests of all shareholders.”

“The creation of an independent Board Chair is a critical step in improving corporate accountability at Loblaws that will give us greater confidence in our investment,” said BCGEU president Stephanie Smith.

“We believe that independent Board leadership would be particularly useful at Loblaw to provide more robust oversight in light of disclosures in 2017 that Loblaw participated in a 14-year price-fixing scheme. Independent Board leadership would, we think, more likely result in improved policies and practices to mitigate this and other business risks,” added Pullman.

Nearly 800 SumOfUs members used the organization’s OurPension tool to contact 135 different  pension fund managers and urge them to support the shareholder resolution.

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