by Richard D. Foley

To fully understand the meaning of the outcome of all the voting it must be acknowledged that there was some duplication between the board proposals and some of the shareholder proposals. As a consequence, it could be argued that the board won and the shareholder proposalists and CHALLENGERS lost. I would not agree with such a conclusion. Corporate Governance is not a matter of one group of shareholders winning and another losing. Corporate Governance is a matter of all shareholders winning. In fact shareholders are prevented from making proposals that favor any subdivision of the shareholder group as a whole.

The regulatory and procedural processes surrounding all actions in the Corporate Governance are complex, time consuming, filled with minutia, and open to error, argument and opposing opinion. With these factors in mind, please understand that the following is a matter of my opinion:-

Alaska Air Group shareholders voted what may well be the highest percentage in the history of Corporate Governance in favor of more open and reasonable system for the company. By voting for the non-management proposals, a considerable percentage of the shareholders sent a resounding message to the AAG's board of directors that they want better governance, and that they will continue close watch on events at the company.

There is, however, one group of shareholders –– workers –– who have been, for all practical purposes, disenfranchised by the breakdown in the systems of delivery of information (proxy statement, voting instruction cards, etc.). The practical consequence is that this VIP group via 401K and other plans did not receive their materials in a reasonable time. I believe that this is a simple matter of fact. I make no accusations against any party, nor do I believe that this was a consequence of any plan to deprive workers of their rights. Like many things we have called the shareholders' and board's attention to over the last four years, there is considerable difference between meeting the minimal-legal acceptable standard and striving for an optimum outcome. I am confident in the future that Alaska Air Group will raise its performance in this area closer to the "optimum" than what has occurred in the past.

When it comes to discussing moral issues, some people have difficulty in their application to the business world. I, however, believe that you cannot separate life in business, government or any other area from the implications of certain basic moral principles. Parse the phrasing however it pleases you, but you simply can't get around the fact that to achieve a well-functioning team, all the individuals must have their individual needs met if they are to perform at an optimum level. This means treating everyone with respect, opportunity and reasonable reward –– i.e. "Do unto others as you would be done unto."

The next big question in the Corporate Governance Arena is addressing the issue of unreasonable reward for some, to the detriment of the many. Also high up on the agenda: motivating the team via mutually-benefical inducements, and abandoning past practices of motivation manipulated by fear.