Strong Vision and Steady Growth
Bering Straits Native Corporation: defined by conscientious leaders and cultural values
Bering Straits Native Corporation President and CEO Gail Schubert (center front) sits with the corporation’s 2019 summer interns as well as several BSNC employees who participated in the summer internship program and have since been hired on full time. (Front row, left to right) Tamaira Tocktoo-Austin, Schubert, Gabby Pierce, Isabel Yamat; (back row, left to right) Justin Maxwell, Elizabeth Ramirez, Lawrence Lynch, Nilson Mixsooke, Lynn Kinney, Michael Anagick, Christian Leckband, Ana Grayson.
The relatively short history of the corporations formed by the Alaska Native Claims Settlement Act is one of determined perseverance. The corporations established in the early 1970s were charged with the responsibility of creating economic opportunity to support their region and shareholders, using surface and/or subsurface real estate and money conveyed as part of the settlement. But experience participating in the corporate sphere isn’t something one can transfer via signed agreement, and many corporations struggled in their early years.
For Bering Straits Native Corporation (BSNC), one of the corporation’s most challenging years was 1986, when it filed for Chapter 11 bankruptcy protection. According to a four-part BSNC Land Series by Vice President of Media and External Affairs Matt Ganley, “BSNC made errors, and in some cases was the recipient of unscrupulous or inadequate investment and business advice. Companies were purchased and investments made with the long-term goal of developing a business portfolio that would enhance the original ANCSA settlement. These often proved to be companies that looked promising but had little value as long-range growth strategies. As the late Charlie Johnson once said, ‘We bought a tire company with no tires and a construction company with no equipment.’”
What followed was a “series of complex agreements designed to protect BSNC’s land base, repay the village corporations for the lost settlement funds, and bring BSNC back from bankruptcy.”
And BSNC has ultimately been successful in attaining those goals, garnering more than $378 million in gross revenue in fiscal year 2019 and using earnings to support shareholders, descendants, and the region with scholarships, bereavement assistance, and elder and shareholder dividends, among other programs, funds, and activities.
Drawing from Experience
BSNC has grown as a company in large part because the leadership driving the company has grown and evolved. President and CEO Gail R. Schubert is an original BSNC shareholder, an Inupiaq Eskimo born and raised in Unalakleet.
Schubert has been passionate about education and personal growth from a young age. Her older sister, Rose, went to school and earned a nursing degree. “I idolized her as a child… I wanted to be just like her, and that really cemented in my brain that I was going to continue my education after high school,” Schubert says.
Schubert’s parents also impressed upon their children the value of going to college; she describes it as a focus on education without being oppressive. “When my mother was much younger, she wanted to leave Unalakleet and get her nursing degree. I believe her mother told her that she couldn’t do that because she had to stay and help raise her siblings. And so my mom told me that when that happened, she made the decision that she would never stop any of us from leaving to continue our education.” Of the nine children in Schubert’s family, three graduated from Stanford, two received law degrees, and three have MBAs.
Schubert did all three—earning her undergraduate from Stanford, an MBA from Cornell University’s Johnson School of Management, and graduating from the Cornell School of Law.
After graduating she worked in New York for a number of Wall Street firms. Initially she worked at the Federal Reserve Bank of New York, performing regulatory work for two years before moving to a small department at Fried, Frank, Harris, Shriver & Jacobson that provided high net worth tax and estate planning, transactional legal advice, asset purchase and disposition, and probate work. Schubert moved on to another smaller firm in New York, where she worked closely with an IRS estate tax auditor to value and then settle a complex tax dispute based on disparate valuations of an international family-owned company.
Schubert describes moving to New York after graduating from Cornell as one of the most daring things that she’s done in her life, but taking that chance served her well. “It helped to prepare me for anything… It was really fast learning and then execution, and that gave me the ability to look at issues or things that need to be done and just focus on getting them done, irrespective of whether that requires working nights or weekends.”
After eight years of tempering in the high-stress world of Wall Street, Schubert decided it was time to come home. Upon returning to the 49th State, she took a position at a local law firm, where one of her clients was involved with government contract work, introducing Schubert to the sector. “Because I had lived out of state, I wasn’t aware of the kinds of things that Alaska Native corporations were doing,” she explains.
In 1992, she ran for and was successfully elected to the BSNC board. “The corporation was fairly small at the time, I think under $10 million in revenue, and I felt I could apply my skills and knowledge to help,” she recalls. “I recognized [government contracting] as a growth opportunity.”
So in 2003, when Schubert was hired at BSNC to serve as the corporation’s executive vice president and general counsel, she persuaded that client to come on board, “and that started our growth in government contracting. With that came the opportunity to invest in other things.”
Over the coming years Schubert continued to grow and evolve with BSNC. In 2009 Schubert was promoted to CEO, and in 2010 she was named the company’s president and CEO when then-President Tim Towarak resigned to accept a position as the Federal Subsistence Board co-chair. Towarak said at the time of her promotion, “I have every confidence that under Gail’s leadership, BSNC will continue the significant growth trend it has experienced in the past decade.”
His confidence was well-placed.
In 2010 the company’s gross revenue was approximately $190 million, and in 2018 BSNC reported revenue of $415 million.
Gail Schubert (center front) is deeply invested in the summer internship program; the 2019 summer intern group includes (from left to right) Justin Maxwell, who’s pursuing a degree in business management at UAA; Elizabeth Ramirez, who’s working on a bachelor’s degree in geological sciences with a minor in mathematics at UAA; Michael Anagick, currently working on his mechanical engineering degree at UAA; Lawrence Lynch, who is starting college this fall as an accounting major; and Gabby Pierce, currently enrolled at APU and pursuing a degree in psychology.
“BSNC is very proud to invest in its shareholders and descendants. I encourage our students to fully utilize scholarships from the Foundation to obtain an education or training that will benefit our region, Alaska, and our people.”
Become an Industry Sponsor
As a leader, Schubert understands her value as well as the essential contributions of others in keeping the corporation on course. “This is a position in which you have to heavily rely on the people you work with to accomplish your goals. And that’s why I think it’s critical to surround yourself with really smart, motivated people: ‘A rising tide raises all boats,’” she says.
Schubert approaches leadership by empowering her management team to run their departments in a way that ensures success; however, “They will tell you that shareholder and descendent hire and training is very, very important to me. This is an Alaska Native company. We are an Alaska Native corporation owned by Alaska Native people, and I think it’s important for us to hire and train our shareholders and descendants and other Alaska Natives, as well.”
For Schubert, it’s clear that people come first. She’s driven by “the opportunity to continue to grow Bering Straits and provide the kinds of benefits that we’ve been able to provide to our shareholders and descendants for many years.” For a number of years while the company recovered from its rocky start, shareholders received a dividend of $50, which Schubert says the shareholders appreciated, as modest as it was. “One of the things the board has since focused on is giving back to our elders because during periods of financial difficulty for Bering Straits, they were very supportive of what we were trying to do.”
That laser focus has had results. In 2018, BSNC was able to distribute a special $1,000 elder dividend, an increase of $250 over the year prior. For the 2017/2018 academic year, the Bering Straits Foundation awarded more than $238,000 in education funding to BSNC shareholders and descendants and has provided more than $2.8 million since 1991. BSNC recently doubled scholarship funding for undergraduate, graduate, and vocational Bering Straits Foundation student recipients. Newly-approved scholarship increases are effective for the fall 2019 term.
“BSNC is very proud to invest in its shareholders and descendants,” Schubert says. “I encourage our students to fully utilize scholarships from the Foundation to obtain an education or training that will benefit our region, Alaska, and our people.”
This year the corporation increased its bereavement assistance from $1,500 to $2,500. “The opportunity to give back to the community is what really motivates me—being able to ensure that our shareholders and descendants benefit from BSNC being the kind of entity that it is.”
To that end, BSNC recently filled a newly-created shareholder development director position. Lucille Sands is the company’s first shareholder development director and will design and implement strategies to align shareholder development with organizational goals and business needs; work to recruit shareholders and descendants for open positions; source qualified shareholders; and provide ongoing review and metrics related to open positions. Schubert emphasized in the hiring announcement that “BSNC is owned by and exists for the benefit of our shareholders and descendants… [and] strives to empower our people as leaders of the Arctic region.”
Schubert is also personally invested in the Summer Internship Program at BSNC. “The internships are really exciting to me because this next generation of shareholder descendants are super bright,” she says. The paid internship program accepts shareholder or descendent students who are enrolled in a college or technical school; from late May to early August, the students gain corporate experience while working forty hours a week.
Tamaira Tocktoo-Austin (left) and Lawrence Lynch, 2019 summer intern, both work in the Bering Straits Native Corporation accounting department; Tocktoo-Austin is a former summer intern.
“BSNC is owned by and exists for the benefit of our shareholders and descendants… The internships are really exciting to me because this next generation of shareholders descendants is super bright.”
After its low point in 1986, BSNC refocused its attention on Nome and in-region business, but today it has operations in Alaska, the Lower 48, and internationally. The corporation’s twenty-plus subsidiaries perform services across multiple industries. For example, the Aurora Inn & Suites offers hotel accommodations in Nome; Eagle Eye Electric provides construction, renovation, electrical services, and environmental solutions; and Global Management Services helps clients with full-facility operations and maintenance support.
But BSNC still has an eye on home. For twenty years, BSNC partnered with Knik Construction through subsidiary Sound Quarry Incorporated to operate Cape Nome Products, which produced industrial grade armor stone and riprap at the Cape Nome Quarry. In December last year, BSNC acquired Knik Construction’s 49 percent interest in Cape Nome Products, and 2019 marks the first year that Sound Quarry Incorporated has conducted quarry operations independently.
A number of shareholders and descendants work at the operation, which Schubert visited in June. “It’s exciting to have a resource that we take from A to Z in terms of production and then ship it to locations in Alaska where it’s used for revetment and other projects to protect the shoreline and expand marine infrastructure,” she says. Rock from the quarry has been used for sea walls in Shishmaref and Unalakleet and in the construction of the Nome port, among other locations.
Looking forward, Schubert says BSNC always has an eye open for acquisition opportunities, which in recent years have served the company well. In 2015 BSNC acquired Alaska Industrial Hardware, a leader in Alaska in providing equipment, tools, industrial materials, maintenance supplies, and safety products through its eight locations statewide. BSNC took advantage of the acquisition in the following years when Alaska’s economy faltered, using Alaska Industrial Hardware resources to support and even expand government contract work.
Schubert also has an avid interest in how climate change is affecting the Arctic region BSNC serves. “Opportunities in the Arctic are happening a lot quicker than folks realize,” she says. To that end, BSNC has spent the past five years working to transfer lands at Port Clarence to the corporation. While the process has taken time, Schubert is hopeful for a resolution within six months. “There remains a need to ensure that there are no pollutants on the land before it’s transferred to us,” she clarifies.
“In terms of the Arctic, when you look at what Russia—and more recently China—are doing in the Arctic, it really becomes pretty clear that the United States has to do something. The United States is an Arctic nation because of Alaska and needs to invest in infrastructure in the area to ensure that its national boundaries are protected.”
Port Clarence is a natural deep water harbor and has served as a gathering place for the region’s people for generations. Even without port infrastructure, ships already use Port Clarence as a safe harbor when storms arise on the Bering Sea, making it a natural location for a developed deep-water port to take advantage of increasing Arctic marine traffic.
Whatever changes are in store for the region and its residents, as one of the guiding hands for BSNC, Schubert recognizes how the corporation serves people and how they support the corporation. “I am really grateful to our shareholders and elders who stood beside us and stood with us as we struggled to improve our financial position. Without their support—and it really was absolute support—we would not be where we are today.”
Bering Straits Native Corporation regularly hires summer interns to work full time at the corporation; Justin Maxwell (far right) and Lawrence Lynch (far left) are 2019 summer interns; Tamaira Tocktoo-Austin, Lynn Kinney, Isabel Yamat, and Christian Leckband (left to right) are all current employees.
“Opportunities in the Arctic are happening a lot quicker than folks realize.”
In This Issue
Mining in 2019: The Year in Review
Following a year when metal prices were both up and down—sometimes dramatically; when international trade squabbles spooked investors to both enter and exit the metals markets; and when mining companies started the year cautiously bullish but ended it cautious bearish, those involved in Alaska mineral exploration, development, and production are once again asking themselves: “Where did we succeed, where did we fail, and where do we go from here?”