San Ramon, Calif: Apple shareholders approved a proposal to urge the iPhone maker to undergo an independent audit to assess its treatment of women and minority employees, a rare assessment of the management team running the world’s most valuable company. condemnation.
The measure passed at Apple’s annual meeting on Friday is non-binding, so the Cupertino, California-based company is not required to adopt the recommendation.
But rejecting shareholder wishes would embarrass Apple, especially since the company has long cast itself as a civil rights defender. Chief Executive Officer Tim Cook reiterated that belief Friday in response to questions from shareholders during a remote meeting.
“I’ve always believed that inclusivity and diversity are essential in their own right,” Cook said. “And diversity of people, experiences and ideas is the foundation of any new innovation.”
Like other major tech companies, Apple’s workforce — especially in high-paying tech positions — is largely made up of white and Asian men, an imbalance the industry has been trying to address for years.
Apple’s board had opposed shareholder proposals for a civil rights audit, which was eventually made public. The company noted that it has recently made strides in civil rights, both inside and outside Apple, that make third-party audits of its practices unnecessary.
Those moves include Apple’s $130 million commitment to the Racial Equity and Justice Fund following the 2020 murder of George Floyd in Minneapolis. The company also said it is raising wages for female and minority employees, while also hiring more women, blacks and Hispanics.
During Friday’s meeting, Cook said Apple has achieved gender pay parity every year since 2017 and now has racial pay parity in the United States. He also said that over the past year, 59 percent of Apple’s leadership positions were filled by people from “underrepresented communities.”
But proponents of the civil rights proposal insist Apple is not doing enough, so outsiders must investigate recurring reports of sexual harassment, discriminatory practices and other abuses within the company, which employs 154,000 people worldwide.
The proposal gained momentum after Apple last year hired former Facebook product manager Antonio Garcia Martinez to join its advertising team — a move that sparked an outcry from employees who accused him of publishing a 2016 book Misogynistic and racist remarks were made in a book called “The Chaos Monkeys”. “Apple quickly severed ties with Garcia Martinez after the backlash.
Apple also last year raised widespread privacy concerns by announcing plans to scan iPhones for child sexual abuse images. Complaints about the scanner prompted Apple to abandon the program, but it provided another rallying point for proponents of civil rights audits.
Most shareholder proposals are overwhelmingly rejected when opposed by public company boards. That was the case with five other shareholder proposals at Apple’s meeting on Friday.
Apple shareholders generally have been enthusiastic supporters of the company because of the tremendous wealth that it has created. Apple currently is worth nearly $2.7 trillion, with most of the gains coming during the past two years of a pandemic that has made its products and services even more popular.
Yet the proposal for a civil rights audit of Apple won the backing of two advisory firms that often sway the votes of institutional shareholders. The audit proposal was supported by 5.13 million shares and opposed by 4.45 million shares, with 131.2 million shares abstaining, according to a Securities and Exchange Commission filing by Apple.
The outcome “shows that investors want to know if Apple is making a difference in tackling potential harms to key stakeholders stemming from its products and policies,” said Dieter Waizenegger, executive director of SOC Investment Group, which was one of the shareholders that filed the civil rights proposal. “Investors heard from Apple’s corporate and retail workers who bravely spoke out against inequitable and harmful conditions even under the threat of retaliation.“
Similar shareholder proposals seeking civil rights audits have been adopted during the past year at several other publicly held companies, including CitiGroup.
Although he didn’t say whether Apple intends to submit to a civil rights audit, Cook described gender and racial equity “essential to the future of our company.”