Safeway To Change Board Rules
By George Anderson
Last May, Safeway shareholders voted for a non-binding referendum seeking to revise the company’s policy toward the selection of its Board of Directors.
Yesterday, the board voted unanimously to declassify itself after what the Associated Press referred to as “intensifying criticism from shareholders who contend the board
has become too cozy to do its job.”
Three of the board members are company insiders, including the current and former chairmen of the chain, Steve Burd and Peter Magowan, plus Len Lopez who runs a supermarket in
Mexico that Safeway has a large stake in.
The company’s dealings with another member of its board, William Tauscher, have drawn criticism by those fearing loans made to him by Safeway could alter his votes on key issues.
Among Mr. Tausher and Safeway’s critics including the state treasurer of California, Phil Angelides, and the comptroller of New York City, William Thompson Jr.
Safeway denies any impropriety in its dealings with Mr. Tausher and the company chairman, Steve Burd, says its actions on the non-binding referendum demonstrate the company is
“committed to adhering to the highest corporate governance standards.”
Moderator’s Comment: What’s wrong with the current system that companies have for choosing a board of directors? Are retailers that are publicly traded
at a competitive disadvantage because of how they are structured?
Safeway has done the smart thing by declassifying the board. The pressures the company is facing and the problems it has in the marketplace has many looking
for scapegoats. Sometimes, the appearance of impropriety, even if none has taken place, can damage an individual and/or company as much as an actual breach in ethical behavior.
[George
Anderson – Moderator]