David Beatty urged to resign from dual-class boards

NUPGE, SEIU say managing director of Canadian Coalition for Good Governance should sever ties with undemocratic companies - FirstService and Garbell Holdings Ltd.

Toronto - The National Union of Public and General Employees (NUPGE) and the Service Employees International Union (SEIU) are encouraging David Beatty, managing director of the Canadian Coalition for Good Governance (CCGG), to resign from the boards of directors of companies with dual-class stock.

Currently, Beatty is a director of two companies, FirstService Corp. (Nasdaq: FSRV) (Toronto: FSV.SV) and Garbell Holdings Limited (Toronto: GBH.PR.A), which have dual-class stock structures that grant wildly-different voting rights to the holders of different classes of stock.

In a June 13th letter, NUPGE President James Clancy and SEIU President Andrew Stern praised the CCCG as "a strong and effective voice against dual-class stock structures," but expressed concern that Beatty's "continued presence ... on FirstService's and Garbell's boards might be viewed by some as legitimizing the company's dual-class stock structure."

"To avoid any suggestion, however unwarranted, of inconsistency in CCGG's support of equal shareholder rights," the letter continued, "we respectfully encourage you to resign your position as a FirstService director as soon as practicable."

The formal request is the latest action taken by the two unions in an effort to address concerns over dual-share voting issue. Workers have an increasing stake in corporate governance because of huge and ever-growing investments by pension funds in private corporations

In May, the unions jointly released a white paper examining many of the potential problems associated with dual-class stock.

The report, available for download in pdf format, looks at the 96 TSX-listed companies that have capital structures in which holders of one class of common stock have greater voting rights than holders of another class.

These capital structures, commonly referred to as 'dual-class' structures, allow an individual or group to exercise voting control of a company even though their equity stake may be far less than 50%.

David Beatty, Managing Director
Canadian Coalition for Good Governance
BCE Place
Bay Wellington Tower, PO Box 777
181 Bay Street, Suite 4510
Toronto, ON M5J 2T3

June 13, 2005

Dear Mr. Beatty,

For a number of years, the Canadian Coalition for Good Governance (CCGG) has been a strong and effective voice against dual-class stock structures.

Recognizing the unfairness and potential for conflicts of interest inherent in dual-class stock, CCGG staff, officers and members have done an excellent job of raising awareness of this issue among the investing public.

And last year, the CCGG’s efforts played a pivotal role in the Toronto Stock Exchange’s decision to assign each subordinated share a single identifying letter in its stock symbol so that investors know exactly what they are buying.

Given the CCGG’s high-profile opposition to dual-class stock, we were surprised to learn that you serve on the board of FirstService Corporation and Garbell Holdings Limited, companies that treat shareholders unequally through dual-class stock.

We are concerned that the continued presence of CCGG’s Managing Director on FirstService’s and Garbell’s boards might be viewed by some as legitimizing the company’s dual-class stock structure.

To avoid any suggestion, however unwarranted, of inconsistency in CCGG’s support of equal shareholder rights, we respectfully encourage you to resign your position as a FirstService and Garbell director as soon as practicable.

Your resignation would serve as a powerful reminder to corporate Canada that the large institutional shareholders who make up the CCGG do not in any way condone the disparate treatment of shareholders through dual-class stock.

If you have any questions, please call Larry Brown, Secretary-Treasurer of the National Union of Public and General Employees or Steve Abrecht, Director of the Service Employees International Union Capital Stewardship Program.

Sincerely,

(original signed by)

James Clancy	Andrew Stern
National President, NUPGE	President, SEIU

NUPGE and SEIU also filed a shareholder resolution at the recent FirstService Corp. annual shareholder's meeting, requesting the company take steps to eliminate its dual-class stock structure. NUPGE

The National Union of Public and General Employees (NUPGE) is a family of 14 component unions. Taken together we are the second largest union in Canada. Most of our 340,000 members work to deliver public services of every kind to the citizens of their home provinces, including health care, post-secondary education and community social services. We also have a large and growing number of members who work in the private sector, including the hospitality and brewing industries. Our members participate in pension funds with over $70 billion in assets, some of which are members of the Canadian Coalition for Good Governance. NUPGE strongly supports sound corporate governance practices and socially responsible investment policies and strategies. NUPGE

SEIU represents 1.8 million healthcare, building service, and public sector workers, including nearly 100,000 Canadian workers, who participate in pension funds with over $1 trillion (US) in assets. SEIU is a longtime advocate of responsible corporate governance practices and an active member of the Council of Institutional Investors, an organization of over 130 pension funds whose assets exceed $3 trillion (US).