Maple Leaf Foods has handed a seat on its board to the CEO of activist investor West Face Capital, a sign the Canadian food group is trying to quell shareholder concerns over corporate governance and close ties to the McCain family.
West Face Capital boss Gregory Boland will serve on two Maple Leaf‘s committees, covering corporate governance, human resources and compensation.
The activist hedge fund has been pressing for changes in the make-up of Maple Leaf’s board. In December, it claimed that there were “deficiencies” in Maple Leaf’s “board independence and corporate governance”.
Following Boland’s appointment, West Face Capital will withdraw its request to vote on five, non-binding advisory resolutions.
“Mr. Boland’s appointment is part of an ongoing process to make changes in the composition and structure of our board that reflect the recent significant changes in our shareholder base,” said James Hankinson, chair of Maple Leaf’s governance committee. “Mr. Boland brings both experience and perspective that will be an asset to the Board as we continue to build sustained shareholder value.”
The board has also retained an executive search firm to find a second new independent director to nominate at the 2011 AGM. As part of the agreement with West Face Capital, the board will also reduce the number of directors to be nominated for election at the 2012 AGM from 14 to 10 or 12.
Depending on the number they settle on, four of the incumbent directors will not be re-nominated and the board will nominate two independent directors.
Shares in Maple Leaf were up 1.84% today at 9:50 EST to C$11.6 a share.