Apple shareholders have approved a proposal that would require the iPhone maker to undergo an independent audit evaluating its treatment of women and minority employees, which a management team leading the world’s most valuable company issued a rare reprimand.
The measure, passed during Apple’s annual meeting on Friday, is non-binding, meaning the Cupertino, California-based company does not have to accept the recommendation.
But rejecting the wishes of its shareholders would put Apple in an awkward position, especially given the company’s long profile as a civil rights advocate. CEO Tim Cook reiterated that belief Friday in response to a question from a shareholder during the remote meeting.
“I’ve long believed that inclusion and diversity are essential in their own right,” Cook said. “And that a diversity of people, experiences and ideas is the basis for every new innovation.”
Like other big tech companies, Apple’s workforce — particularly in high-paying tech positions — is made up mostly of white and Asian males, an imbalance the industry has been trying to fix for many years.
Apple’s board of directors had resisted shareholders’ proposals to seek a civil rights review, which would eventually be made public. The company noted its recent advances in civil rights, inside and outside Apple, that have eliminated the need for third-party scrutiny of its practices.
Initiatives included Apple making a $130 million (approximately Rs.993.5 million) pledge to a Racial Equality and Justice Fund following the 2020 killing of George Floyd in Minneapolis. The company also says it is increasing wages for women and minority employees while hiring more female, black and Hispanic workers.
During Friday’s meeting, Cook said Apple has achieved gender pay equity every year since 2017 and now has racial pay equity in the US. He also said that 59 percent of Apple’s leadership positions last year were filled by people from “underrepresented communities.”
But supporters of the civil rights proposal insisted that Apple hadn’t done enough, making it imperative for outsiders to 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 a former Facebook product manager, Antonio Garcia Martinez, to join its ads team – a move that sparked an outcry from employees who accused him of being involved in a book titled “Chaos Monkeys” of 2016 for making misogynistic and racist remarks.” Apple quickly severed ties with Garcia Martinez after the backlash.
Apple also addressed widespread privacy concerns last year by announcing plans to scan iPhones for images of child sexual abuse. Complaints about this scanning program caused Apple to deviate from this plan, but it provided another rallying point for civil rights review supporters.
Most shareholder motions are overwhelmingly defeated when rejected by the boards of publicly traded companies. That was the case with five other shareholder proposals during Apple’s meeting on Friday.
Apple shareholders are generally ardent supporters of the company because of the tremendous wealth it has created. Apple is currently worth nearly $2.7 trillion (around Rs. 2,06,35,000), with most of its gains coming in the last two years of a pandemic that has made its products and services even more popular.
But Apple’s civil rights review proposal won the support of two consulting firms that often influence institutional shareholder votes. The review proposal was supported by 5.13 million shares and opposed by 4.45 million shares, with 131.2 million shares abstaining, according to a filing filed by Apple with the Securities and Exchange Commission.
The finding “demonstrates that investors want to know if Apple is making a difference when it comes to addressing potential harms to key stakeholders arising from its products and policies,” said Dieter Waizenegger, executive director of SOC Investment Group, which was one of the shareholders who filed the civil rights proposal: “Investors heard from Apple’s corporate and retail employees who courageously spoke out against unfair and harmful conditions, even under threat of retaliation.”
Similar shareholder motions seeking civil rights reviews were accepted by several other public companies over the past year, including CitiGroup.
Although he didn’t say whether Apple intends to undergo a civil rights audit, Cook described gender and racial justice as “essential to the future of our company.”
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