Walgreen partners with UAW trust on governance disclosures
By Barry B. Burr | January 9, 2013 3:29 pm
UAW Retiree Medical Benefits Trust and Walgreen Co. agreed to develop together a policy for the company's oversight and disclosure of its political spending and its participation in trade associations and other tax-exempt organizations, according to a statement Wednesday from the $52.4 billion Ann Arbor, Mich.-based fund.
The agreement includes a commitment for a series of meetings over the next two years between UAW trust and Walgreen officials on political spending and lobbying oversight and disclosure; a review of existing board and management oversight on political and lobbying expenditures; “codifying internal processes for consideration of political and lobbying expenditures consistent with the company's best interests; and developing a framework to review current and future memberships and participation in trade associations and other tax-exempt organizations.”
UAW trust will not seek to pre-empt the company in its decisions on political activity and spending, or participation with trade groups or other organizations, Meredith Miller, UAW trust chief corporate governance officer, said in an interview.
The goal of the UAW trust is greater transparency through strengthening the company's policies on oversight and disclosure to ensure they align with long-term shareholder value, Ms. Miller said in the interview.
“We would raise red flags (about) contributions we felt we couldn't understand on how they were aligned with the business interest of the company or might raise future risk for long-term shareholder value,” Ms. Miller said.
Walgreen agreed to the collaboration in exchange for the UAW trust withdrawing its shareholder proposal on political lobbying disclosure, Ms. Miller said.
At the Walgreen annual shareholder meeting Wednesday, Cambria Allen, UAW trust corporate governance director, said, according to prepared remarks: “Absent a robust system of transparency and accountability, it is impossible for investors to know whether direct and indirect expenditures on political activity are used to promote value creation or to satisfy private interests. Poor oversight of political and lobbying activity also may expose shareholders to significant financial, regulatory and reputational risks.”
Thomas J. Sabatino Jr., Walgreen executive vice president, general counsel and corporate secretary, who is overseeing the company's end of the collaborative effort, was at the company's shareholder meeting and unavailable for comment.
In the remarks, Mr. Sabatino said: “We are pleased to begin a dialogue with the trust that is a model of both the shareholder and the company listening and learning from each other.”
Susan Ellen Wolf, CEO of Global Governance Consulting, which is assisting Walgreen, said in an interview that Walgreen wants to be more transparent by providing useful information to shareholders.
The trust hopes the agreement will serve as a model for other corporations and help in shaping future rules and regulations on these issues.
The UAW trust owned 524,942 Walgreen shares, valued at $19.8 million, as of Jan. 3, Ms. Miller said in the interview.