Apple CEO Tim Cook attends the grand opening event of the new Apple store at The Grove on November 19, 2021 in Los Angeles, California.
Mario Tama | Getty Images
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.
SOC Investment Group, which backed the 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.
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. Five other shareholder proposals were rejected.
The exact tally of Apple’s shareholder votes hasn’t been released yet.