Labor Unions Call for Independent Board at Quebecor World
Press release from the issuing company
MONTREAL, April 2 -- The Canadian Labour Congress (CLC) and AFL-CIO called on Quebecor World to ensure a truly independent board of directors by appointing an unrelated, outside director to represent the interests of shareholders. The labor federations also question the independence of one current board appointee.
"Quebecor World needs a truly independent voice on its board to restore investor confidence," said the AFL-CIO Secretary-Treasurer Richard Trumka. "Workers' retirement savings are invested in Quebecor World. Current management turmoil, recent profit warnings and a declining stock underline the need for strong independent oversight to counterbalance insider influence."
"Quebecor World must not ignore investors' demands for more transparent and independent boards of directors. Inaction by Canadian regulators and the Toronto Stock Exchange on this crucial issue does not excuse corporations from taking steps to protect the pension funds and other retirement savings of working people," said Kenneth Georgetti, President of the Canadian Labour Congress.
To ensure that shareholders have a strong advocate on Quebecor World's board, representatives from the AFL-CIO spoke at today's annual general meeting urging the Board to appoint an "independent lead director." Current Quebecor World Chairman and former Canadian Prime Minister Brian Mulroney is a not independent director because he is a senior partner in a law firm that provides legal counsel to Quebecor World.
In a letter to Chairman Mulroney, the AFL-CIO also raised concerns about the close ties of one board candidate -- Charles Baillie -- to Quebecor World and to other Peladeau holdings when it nominated him for a board seat.
Under the stewardship of Board nominee Charles Baillie, former CEO and current Chairman of Toronto-Dominion Bank Financial Group (TD Bank), TD Bank did business with both Quebecor World and its parent, Quebecor Inc. TD Bank served as co-lead manager for a placement of $1.01 billion in senior notes for Quebecor Media in 2001. TD Bank also managed Quebecor Inc.'s sell-off of its Abitibi-Consolidated holdings in 2001. Quebecor World had to report its transactions with TD Bank in its proxy as "transactions with interested parties" because of the business connections between the two companies.
Both the Toronto Stock Exchange (TSX) guidelines and the proposed rules by the New York Stock Exchange call for a majority of independent directors. For companies like Quebecor World with a "significant" shareholder controlling a majority of ballots, TSX guidelines further recommend that boards nominate additional directors with no business or other ties to the controlling shareholder. Quebecor Inc., the media conglomerate controlled by Montreal's Peladeau family, is the significant shareholder of Quebecor World, owning 76% of the company's voting rights.
With the recent departure of insider director and CEO Michel Desbiens, Quebecor World's Board of Directors totals 14 members. Presuming that Desbiens's successor is also appointed to the board, if Baillie is considered a related director, Quebecor World's Board will comprise 7 related and 8 unrelated directors. The labor federations believe that an independent lead director would strengthen the Board's independence.
The Canadian Labour Congress, the national voice of the labour movement, represents 2.5 million Canadian workers. The CLC brings together Canada's national and international unions along with the provincial and territorial federations of labour and 137 district labour councils.
The AFL-CIO is the federation of United States labor unions, representing more than 66 national and international unions and their membership of more than 13 million working women and men. Union members participate in the capital markets as individual investors and through a variety of benefit plans. Union members' benefit plans have over US $3 trillion in assets. Pension plans sponsored by unions affiliated with the AFL-CIO account for over US $400 billion of that amount. Many of these funds are invested in Quebecor World.
WhatTheyThink is the global printing industry's go-to information source with both print and digital offerings, including WhatTheyThink.com, WhatTheyThink Email Newsletters, and the WhatTheyThink magazine. Our mission is to inform, educate, and inspire the industry. We provide cogent news and analysis about trends, technologies, operations, and events in all the markets that comprise today's printing and sign industries including commercial, in-plant, mailing, finishing, sign, display, textile, industrial, finishing, labels, packaging, marketing technology, software and workflow.