Shareholders vote for Apple to conduct a civil rights audit, bucking company's recommendation
- Apple shareholders approved a proposal on Friday that said that the company will conduct a third-party civil rights audit.
- The proposal, which was opposed by Apple, was voted on at Apple's annual shareholder meeting on Friday.
- Shareholders also narrowly approved a proposal directing Apple to create a public report about how the company uses concealment clauses in employment contracts with respect to harassment and discrimination.
Apple shareholders approved a proposal on Friday that said that the company's board will conduct a third-party audit examining company policies and provide recommendations to improve its civil rights impact. Apple opposed the proposal.
Apple's shareholders usually vote the way that management recommends, so the approval is a sign that a majority of investors believe that Apple can improve how it handles issues such as gender pay equity, leadership diversity and privacy related to products like AirTags, all of which were mentioned in the proposal.
The proposal comes after a period in which Apple faced public challenges with a pay equity study run by former employee Cher Scarlett despite Apple's stance that it has a gender and racial pay equity policy, and reported diversity metrics that showed that Hispanic and Black employees only represent a small percentage of technology employees and leadership roles at Apple.
Shareholders also narrowly approved a separate shareholder proposal directing Apple to create a public report about how the company uses concealment clauses in employment contracts with respect to harassment and discrimination.
SOC Investment Group, which backed the civil rights proposal with the Service Employees International Union and Trillium Management, welcomed the approval and said it would help investors monitor whether Apple's actions match its public relations.
"We're going to take the company's own metrics and say, 'Okay, how do you live up to your own commitments?'" Dieter Waizenegger, executive director of SOC said. "Does your activity actually move the needle? Or is it just PR?"
Waizenegger said that the approval signals the increasing willingness of large investors to vote for governance-related shareholder proposals at big public companies. Last year, Microsoft hired a law firm to review sexual harassment policies after its shareholders approved a proposal at its general meeting.
"These big investors are really recognizing the value of these types of reports and audits," Waizenegger said.
Although the proposal is advisory, Waizenegger said, shareholders typically will hold the company's board to account when something is passed with a majority of shareholder votes.
Apple said that it already meets the objectives of the proposal through its current policies, and a representative declined to comment.
"Apple already fulfills the objectives of the proposal in several ways, including through impact and risk assessments, active governance and Board oversight, engagement with our communities and key stakeholders, and regular, transparent public reporting," Apple said in its proxy.
The proposal passed with just under 54% support from shareholders who cast a vote and did not abstain, according to an SEC filing on Friday.
Nia Impact Capital, which backed the non-binding proposal about concealment clauses, said on Friday that it aimed to encourage Apple to foster an inclusive and positive company culture, and hoped that the approval signaled increased shareholder attention on corporate governance and employee issues.
Apple opposed the proposal, saying it already has clear policies protecting employee rights to speak about employment conditions, and it passed with just over 50% support from shareholders who cast a vote.
"It's a huge message from investors saying that they really care about human capital management," Kristin Hull, CEO and founder of Nia, said in an interview.
At the meeting on Friday, Apple shareholders approved the company's compensation plan, including CEO Tim Cook's recent grant of up to 1 million Apple shares, and reelected the company's board. Four other shareholder proposals were rejected.