This excerpt taken from the SWY DEF 14A filed Apr 4, 2007.
STOCKHOLDER PROPOSAL REGARDING AN INDEPENDENT DIRECTOR ACTING AS CHAIRMAN OF THE BOARD
The Trowel Trades S&P 500 Index Fund, c/o its Trustee, Comerica Bank & Trust, National Association, P.O. Box 75000, Detroit, MI 48275, which owns 13,462 shares of Common Stock, has given notice that it intends to present the following proposal for consideration at the Annual Meeting:
RESOLVED: The shareholders of Safeway Inc. (Company) urge the Board of Directors to amend the Companys by laws, effective upon the expiration of current employment contracts, to require that an independent director as defined by the rules of the New York Stock Exchange (NYSE) be its Chairman of the Board of Directors. The amended by laws should specify (a) how to select a new independent chairman if a current chairman ceases to be independent during the time between annual meetings of shareholders, and (b) that compliance is excused if no independent director is available and willing to serve as chairman.
The recent wave of corporate scandals at such companies as Enron, WorldCom and Tyco has resulted in renewed emphasis on the importance of independent directors. For example, both the NYSE and the NASDAQ have adopted new rules that would require corporations that wish to be traded on them to have a majority of independent directors.
Unfortunately, having a majority of independent directors alone is clearly not enough to prevent the type of scandals that have afflicted Enron, WorldCom and Tyco. All of these corporations had a majority of independent directors on their boards when the scandals occurred.
All of these corporations also had a Chairman of the Board who was also an insider, usually the Chief Executive Officer (CEO), or a former CEO, or some other officer. We believe that no matter how many independent directors there are on a board, that board is less likely to protect shareholder interests by providing independent oversight of the officers if the Chairman of that board is also the CEO, former CEO or some other officer or insider of the company.
We respectfully urge the board of our Company to change its corporate governance structure by having an independent director serve as its Chairman.