A significant swath of BC coastal forest changed hands recently when Weyerhaeuser (WY-N) sold 635,000 acres of high quality private timberlands and associated operations to Brascan Corp (BNN.LV.A-T) in a deal valued at Cdn$1.2 billion. While the sale raised few eyebrows in the forest industry, certain stakeholders have concerns that are being met with a nasty form of corporate stonewalling.
(Originally reported by socialfunds.com on 04/20/2005) For the last month, members of the Haida Nation on the Queen Charlotte Islands have blockaded Weyerhaeuser access to two of its lumberyards in protest over being excluded from decision-making over logging rights on its ancestral lands. Perhaps to avoid potentially embarrassing questions, Weyerhaeuser will block its shareholders from open access to address management and the Board of Directors at the company’s Annual General Meeting in Federal Way, Washington.
“I called the company’s corporate secretary yesterday and found out that they will break from a long-standing practice of holding an open-mike Question and Answer period, and instead will require that all questions be submitted ahead in writing,” said Bruce Herbert of Newground Social Investment. “As relayed to me by the company, no shareholder will be allowed to speak at the meeting–CEO and Chair Steve Rogel will read and respond to selected questions for ‘as long as there is time’ and then other questions will purportedly be answered later in an a written format that has yet to be determined.”
Frank Mendizabal, director of media relations for Weyerhaeuser, confirmed this information. “This change is designed to ensure the meeting is orderly and as many questions as possible are answered during the meeting,” Mr. Mednizabal told SocialFunds.com. “We have received information that some people may have intended to dominate the Question and Answer period with very narrow questions to the exclusion of other shareholders opportunity to ask their questions.”
Brant Olson, director of the Rainforest Action Network campaign that seeks to improve Weyerhaeuser’s environmental and social policies and practices, points out that the company is enacting exactly that which it intends to avoid. “Limiting the opportunity to speak in this case is clearly being done by Weyerhaeuser,” Mr. Olson told SocialFunds.com. “Weyerhaeuser has a hundred year legacy of disregarding communities and the environment, and this latest move extends that legacy even to the company’s own shareholders.”
The controversy between the Haida Nation and Weyerhaeuser came to a head when the company sold its BC Coast Group assets, including harvesting rights on Haida lands, to the Brascan Corporation, without consulting Haida leaders. Both sides advance claims that could be viewed as valid by an objective, impartial observer. In order to best understand the complicated controversy between the Haida Nation and Weyerhaeuser and its potential impact on shareholder value, not to mention many other controversial issues facing the company, shareholders need transparent access to information.
Larry Dohrs of Newground Social Investments notes the impact of Weyerhaeuser’s new policy on transparency. “If there are questions from the floor and the company essentially declines to answer, then that decision is visible to the shareholders at large,” Mr. Dohrs told SocialFunds.com. “If there’s a question on a card and the company declines to respond to it, it’s invisible to shareholders that they took that affirmative action to not reply.”
Mr. Mendizabal of Weyerhaeuser did not respond to SocialFunds.com’s questions about the decision-making process for changing the question and answer protocol, whether shareholders were consulted, and how the company weighed potential benefits against potential detriments. He also did not answer where shareholders were informed of the change.
Members of the investment community expressed alarm at the policy change. “This is not just troubling, it is completely unacceptable,” said Mark Regier, stewardship investing services manager at MMA Praxis Mutual Funds, the investment arm of Mennonite Mutual Aid. “Interactivity, being able to see, hear from, and question your company’s leadership on the rare occasion – is the very basis for live annual meetings and a cornerstone of the concept of shareholder democracy. This is the very literal and visual representation of corporate management sticking its head in the sand to hear only what it wants.”
Damon Silvers, associate general counsel for the AFL-CIO, expressed the concern of America’s largest union in a letter to Mr. Rogel, the CEO and Chair. “The AFL-CIO urges you to conduct the annual meeting of Weyerhaeuser in a manner consistent with your fiduciary duty to protect the informed exercise of your shareholders’ governance rights,” Mr. Silvers wrote. “In our view that includes protecting your shareholders’ right to speak candidly and without management pre-approval to each other and to the board of Weyerhaeuser at the company’s annual meeting.”
What I find somewhat troubling in all of this is that the loudest voices challenging Weyerhaeuser’s actions are emanating from the U.S., despite the fact that it is one of Canada’s most prominent First Nations that are the plaintiffs in this affair. I will follow with interest the actions of Brascan and it’s shareholders in allowing the Haida to express their concerns in an open and democratic manner.