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Resolution #2

A shareholder resolution to amend the bylaws to limit the use of discretionary voting

Video from the Resolution Author


Sealaska's Response


View the 2021 Proxy Statement language regarding resolution #2.

The intent of this resolution is to amend current Sealaska Bylaws (Article III Board of Directors, Section 3.3.6.1.4), which would limit the use of discretionary voting by the corporation.

WHAT THE BYLAW CURRENTLY STATES
“The corporate proxy shall provide for discretionary voting and/or selective cumulation for all business properly coming before the meeting of the Corporation. Any other proxy holder representing any independent nominee may also provide for discretionary voting of Directors on a separate proxy, but the corporation proxy form shall not so provide with respect to nominees other than the Board of Directors’ endorsed nominees.”

WHAT AMENDED BYLAWS WOULD STATE IF APPROVED BY SHAREHOLDERS
(new language in bold):

“The corporate proxy shall provide for discretionary voting and/or selective cumulation for all business properly coming before the meeting of the Corporation. Any other proxy holder representing any independent nominee may also provide for discretionary voting for Directors on a separate proxy, but the corporate proxy form shall not so provide with respect to nominees other than the Board of Directors’ endorsed nominees. If no independent candidate using an independent proxy utilizes discretionary votes, then the corporate proxy holders will not be authorized to use discretionary votes for the election of Directors, and any shares for which a shareholder grants discretionary voting authority by proxy will not be counted towards the election of any director and shall be counted towards quorum purposes only.”

Shareholder Resolution #2
Shall Sealaska Corporation amend Bylaw Section 3.3.6.1.4 to restrict the use of Discretionary voting on the Sealaska proxy unless an independent proxy provides for Discretionary voting for the election of directors? This resolution will be adopted if approved by a majority vote of the outstanding voting shares of the Corporation.

The Board of Directors recommends a NO vote.
PROS
  • Some shareholders do not understand how discretionary voting actually works – this resolution would simplify the voting process by eliminating an option.
  • Under the proposal, discretionary voting could still be used on the Sealaska proxy if an independent proxy also provides for discretionary voting.
  • Directed voting allows shareholders to vote specifically for candidates of their choice.
  • Supporters of the resolution believe that limiting the use of discretionary voting would result in more turnover on the Board of Directors.
  • Board turnover results in different perspectives and new ideas.
  • Some other ANCSA corporations use this voting model.
CONS
  • This resolution assumes shareholders who consistently choose to vote discretionary do not know what they are doing.
  • Discretionary voting would not be allowed unless an independent proxy is present. If there is no independent proxy, any discretionary votes would be wasted; valid votes would be thrown out and shareholders who choose to vote discretionary would be disenfranchised.
  • The existing election rules already allow shareholders full freedom to vote directed if they prefer.
  • Turnover on the Board of Directors has already occurred with existing election practices. Many current directors were elected as independent candidates.
  • Stability and consistency are desirable qualities in a Board of Directors for business, financial, and government dealings.
  • Sealaska shareholders have already rejected changes to the discretionary voting rules six previous times.