Democratic Board Elections Offer Alternative To Standard Corporate Governance

CANTON—June 16th, 2003— On June 5th the Board of Directors of Equal Exchange, the nation's leading Fair Trade coffee company, unanimously elected Beth Ann Milardo to be the company's new Chairperson. Ms. Milardo is Equal Exchange's Quality Control Manager and joined the cooperative directly after graduating from Wheaton College in 1996. She was elected to the board by her fellow employee owners in 2002. At 29 Ms. Milardo is one of the youngest board chairs in Massachusetts, as well as in the natural foods and specialty coffee industries.

At the cooperative's annual meeting in May the 40 employee owners also elected three new directors to serve on the nine seat board. The two new inside directors are Forrest Sutton, Manager of Information Systems, and Denise Abbott, Director of Finance. Erbin Crowell, Director of Equal Exchange's Interfaith Program, and board member since 1997, was also re-elected to his third term. Terry Appleby, General Manager of the Hanover Consumer Cooperative, in Hanover, New Hampshire, was elected as Equal Exchange's newest outside board member.

As a worker cooperative Equal Exchange's model of governance is built upon democratic principles and as such is unlike standard corporate practice. Typically rank and file employees have no voice in the composition or control of a company's board, but rather top management select candidates and shareholders cast votes on a one-share, one-vote basis. In contrast Equal Exchange's employees dominate the board, holding six of the nine seats. Only the employees who have been at the company for more than one year own voting shares and do so on a one person-one vote basis. The employees may also nominate candidates for inside and outside seats. Historically, the six inside seats have been held by a mix of both managers and non-managers.

Marjorie Kelly, Editor of Business Ethics Magazine, commented "At a time of crisis in company governance Equal Exchange stands out as a remarkable example of genuine accountability. Its contested elections and knowledgeable employee board members offer a better model than merely having independent directors."

Every year one-third of Equal Exchange's nine board seats come up for election. This year a fourth seat was available as outgoing Board Chair, Jessie Myszka, vacated her seat one year early for a sabbatical. All directors have three year terms. Outside directors are limited to two consecutive terms.

Equal Exchange, the pioneer and U.S. market leader in fair trade coffee since 1986, is a full service provider of high quality, organic coffee, tea and hot cocoa to supermarkets, cafés, and places of worship across North America. 100% of Equal Exchange products are fairly traded, benefiting 29 small farmer cooperatives in 14 countries around the world. Major customers include Kroger, Shaw's, Stop & Shop Supermarkets, Hannaford Brothers, and Harvard and Brown Universities.