As Alaska Native corporation shareholders become increasingly numerous and far-flung, corporation officials worry that one day they may not have enough participation at annual meetings to conduct business.
Aside from serving as reunions and cultural celebrations, the core purpose of the meetings, which can be large and quite costly, is to give shareholders the opportunity to elect board directors and make other important decisions. Under state law, those decisions typically can only be made if attendees represent more than 50 percent of total voting shares.
The minimum participation requirement, known as a quorum, has not posed any outstanding problems until recently. As the generations advance and the original allotments of 100 shares per person are bequeathed to multiple descendants, some corporations believe the percentage of shares represented at their annual meetings are falling to worrisome levels.
At Doyon's annual meeting in March, attendance was just 56 percent of voting shares, said Allen Todd, the corporation’s general counsel. He said that if trends continue, Doyon, the state's largest private landowner, could be in the position of staging a $100,000 annual meeting during which even routine decisions could not be made.
“In that case, shareholders could vote to have another meeting and typically it would fall on another date,” Todd said. “We would have to go back out with a more urgent appeal as far as phone banking and beating the bushes. Needless to say, you'd easily double the cost."
Quorum requirements are common features of laws governing corporations and are intended to ensure that minority interests don't take disproportionate control. Believing its future meetings to be in jeopardy, Doyon and other Native corporations are lobbying the state Legislature to make it easier for them to lighten the requirement.
All corporations created in Alaska since July 1989, by simple majority vote, can reduce the size of their quorums to as little as one-third of voting shares. Corporations created before then, including the Native corporations, face a higher hurdle. They can also reduce their quorums to one-third, but only with approval of a two-thirds supermajority.
Introduced in the House last week by Rep. Lance Pruitt, D-Anchorage, HB149 would change state law to allow Native corporations, like those created after July 1989, to reduce the size of their quorums by simple majority vote.
As for efforts to attract shareholders to its meetings, Doyon conducts an extensive outreach campaign encouraging its 19,200 shareholders, who live all over Alaska and the Lower 48, to participate, said Sarah Obed, vice president of external affairs and a Doyon shareholder. The corporation also offers door prizes -- from hundreds to a few thousand dollars in cash -- in its bid to boost attendance.
“We make phone calls, send direct mailings and email and post on social media,” Obed said. “Aside from our other activities, we reach out to shareholders at sporting events or cultural events both in Fairbanks and Anchorage.”
Shareholders don't need to be physically present at a meeting for their shares to count toward quorum. And they can vote on meeting business online, through the mail or through a representative who attends on their behalf, Obed said.
The ANCSA Regional Association, which represents the CEOs of the 12 land-holding regional Native corporations and the president of the Alaska Federation of Natives, supports the bill.
“The cost of rescheduling or postponing an annual meeting because of a failure to obtain a quorum is tremendous,” the association said in a letter to House Speaker Mike Chenault and Senate President Kevin Meyers. “Many Alaska Native corporations need to be able to amend their articles of incorporation to provide for a lower quorum.”
Congress established the Alaska Native corporations in 1971 under the Alaska Native Claims Settlement Act. Corporation stock was distributed to tribal members born before mid-December of that year. Since then, five regional corporations have granted stockholding rights to Alaska Native descendants of the original shareholders. They are Sealaska, Ahtna, Doyon, Arctic Slope Regional Corp. and NANA. A sixth regional corporation, Calista Corp., is set to vote in July on whether to issue stock to descendants.
Kyan Olanna, who holds shares in Bering Straits Native Corp., said the proposed legislation looks to be a natural result of stock ownership becoming increasingly diluted through inheritance or the issuance of new shares to tribal members born after the original Dec. 18, 1971 cutoff date.
“You've got more people involved, but each of them have less financial interest,” Olanna said.
Still, she wishes the legislation was not necessary and would prefer to see the corporations engage shareholders more meaningfully.
“You would hope that the corporations would continue to be a tie to the land and the region, but not everybody wants to have that emotional attachment to a corporation,” Olanna said.
Others see the legislation as yet another encroachment on their rights by corporations that in the course of a few decades have grown increasingly dismissive of their obligations to shareholders.
“The people that are currently getting significant income as directors and management -- of course they don't want engagement,” said Joan Kane, former director of the Alaska Native Policy Center and a shareholder in the Bering Straits, Sitnasuak and King Island Native corporations. “Shareholders assume that corporations are some democratic entity and they're not.”