Shareholders get a say in how a company operates. This is done through voting. If you own shares in a company, you get a vote. With more shares, you hold more weight. Apple recently held a shareholder vote, and things didn’t go quite as expected. While Apple can make suggestions for shareholder votes, no one has to follow those suggestions. Still, shareholders usually agree with their company. In a rare upset, two of Apple shareholder proposals went against Apple’s suggestions, and others came close to defying Apple. These close items were related to civil rights, non disclosure agreements (NDAs), working conditions, worker pay and equality transparency, and other workers’ rights and safety issues.
Apple shareholders voted in favor of an audit of Apple’s civil rights protections. This includes workers’ rights, potential problems with bias such as sexism and racism, and supply chain issues. Shareholders also voted in favor of more transparency with Apple’s policies regarding concealment clauses. These can keep company secrets safe as employees leave the company, but can also silence victims of sexual harassment and bias.
It’s rare to see shareholders go against the grain to hold a company to higher standards. We could be looking at a change in investors’ strategies, possibly driven by an increase in retail investors. With a number of potential civil rights issues in the past few years, Apple finally has some explaining to do.
Disclaimer
First, a little disclaimer. I am an Apple shareholder. Not much, just what I could for a long-term savings plan. Still, it’s there, and I had a vote in this. In the interest of transparency, I voted for, well, transparency.
Civil Rights and Concealment Clauses Audit
In two close votes, shareholders decided Apple needed more transparency. These were for their civil rights protections and concealment clauses. A third-party audit of Apple’s policies will seek to discern if Apple’s practices lead to civil rights abuses. This came in response to a few troubling statistics at Apple, as well as their recent actions regarding pay transparency and retaliation.
Apple’s technical workforce is only 8% Black and 4% Hispanic. Of that, only one executive is Black, and there are no Hispanic executives. Apple shut down pay transparency surveys that would have found pay discrepancies between employees based on race, gender, sexual orientation, or other protected status. Instead, Apple shut these surveys down. However, third party results show Apple may have something to worry about.
Apple also fired a woman who accused the company of sexism, harassment, and retaliation. From her description of events, as well as evidence she shared on Twitter, it’s hard not to understand that the complaints may be legitimate. Multiple employees have filed complaints with the National Labor Relations Board (NLRB). Now, shareholders are pushing Apple to allow a third-party investigation into potential civil rights abuses at the company, against Apple’s wishes.
Concealment Clauses Silencing Employees
Shareholders just barely voted in favor of transparency around Apple’s concealment clauses. Concealment clauses, often called NDAs, protect companies from employees leaving the company and disclosing trade secrets elsewhere. However, they mostly include “non-disparage” sections that silence employees from talking about bias, racism, sexism, homophobia, retaliation, or other discrimination. This has become a serious issue in tech, with women coming forward about sexism and harassment in the workplace anonymously. It’s why it takes years for government organizations to file lawsuits over discriminatory practices at companies.
In California, the “Silenced No More Act” protects employees from retaliation. NDAs cannot require they be silent about “harassment, discrimination, and other unlawful acts,” from the proposal. However, not all Apple employees are located in California, and others may have been kept silent in the past. If Apple listens to shareholders here, they’ll have to be transparent about their concealment clause practices, and whether or not they’re building in protections for employees everywhere.
What Didn’t Win — But May Still Influence Change
Apple also decided to stand against a few measures that shareholders also opposed. These included attempts to increase transparency in the supply chain, conducting an audit for potential forced labor. Apple claims they already do this, but standing against the measure seems silly if they do indeed already do this. The same goes for the proposal for transparency into employee pay, specifically gender and racial pay gaps. Shareholders also proposed Apple disclosing the number of apps and categories of those apps they’ve removed at the behest of governments.
All of these measures “lost.” That is, they didn’t reach the 50% threshold to influence Apple’s decision making. However, they all were above 30% of the vote. When proposals get more than 25% of the vote, they typically influence company policy or practices. While these may not be taken as seriously as the proposals that did meet the 50% mark, Apple will be wise to consider them. Since they have overlapping goals, it’s likely Apple will tie investigations into these issues that they supposedly already perform into any reports they conduct themselves.
Apple is often seen as an influencer in tech. Companies follow Apple’s example. With Apple considering shareholder proposals for more transparency and a focus on protecting civil rights of employees, other companies may follow suit. The tech industry has been ripe for a reckoning, and this could be the another step towards a better tech industry for everyone.