Updated below with vote tallies.
Microsoft pledged to release more information about sexual harassment cases after shareholders approved a resolution on the issue that cited, among other examples, allegations that surfaced earlier this year involving Microsoft co-founder Bill Gates.
Speaking at the company’s virtual shareholder meeting, Microsoft President Brad Smith gave a preview of the types of data to be released: Microsoft received 51 complaints from employees in its recently completed fiscal year, and 47% were substantiated, he said.
That compared with 142 complaints the prior year, 49% of them substantiated. The decline in the total number probably resulted from the shift to remote work, he said.
The shareholder proposal was submitted by Arjuna Capital, an investment firm that describes itself as “a champion of workplace concerns for minorities and women.”
“Reports of Bill Gates’ inappropriate relationships and sexual advances towards Microsoft employees have only exacerbated concerns, putting in question the culture set by top leadership, and the board’s role holding those culpable accountable,” the proposal said, in part. “Investors are concerned Microsoft may be facing a culture of systemic sexual harassment, putting at risk the company’s ability to attract and retain talent.”
This was the resolution approved by shareholders:
Shareholders urge the Board of Directors to release a transparency report (at reasonable expense, omitting confidential or privileged information) to shareholders assessing the effectiveness of the company’s workplace sexual harassment policies, including the results of any comprehensive, independent audit/investigations, analysis of policies and practices, and commitments to create a safe, inclusive work environment.
Microsoft’s board had recommended a vote against the proposal, calling it “unnecessary because Microsoft has adopted plans to begin annual public reporting in this fiscal year on Microsoft’s implementation of our sexual harassment and gender discrimination policies.”
In a recorded presentation at the meeting, Natasha Lamb, Arjuna Capital managing partner, acknowledged Microsoft’s prior commitment to put more resources into sexual harassment investigations.
However, she said, Microsoft “failed to commit to two key requests in our proposal: independent investigations and public reporting on the executive level probe into Mr. Gates. These elements are crucial for the company to remediate the issue of workplace sexual harassment. Independent investigations are the only way to ensure investors that subjectivity is removed when conducting investigations.”
In his comments after the vote, Smith did not address the Gates case specifically.
He said Microsoft “will bring in a third party do an independent assessment of all of the work that we do to investigate these cases. We’ll share what that independent report says, and we will listen. And if there’s recommendations for change, we will think hard about making them.”
Smith said it’s an issue of “enormous importance” to Microsoft and its employees. The company has been sharing more data internally, and now it will release new reports externally, he said.
“There are new steps that we are going to take that we were thinking about, and I think that the resolution and the dialogue we’ve had has helped us advance our decision making,” he said.
The proposal suggested that Microsoft issue an annual report with these components:
- Effectiveness of sexual harassment and gender discrimination policies, trainings, and measures;
- Results of any independent investigation into executive level allegations, including recent Gates allegations;
- Steps taken (or that could be taken) to hold employees and executives accountable;
- Number of sexual harassment cases investigated and the resolution.
It’s common for companies to oppose shareholder proposals, and uncommon for them to be approved by shareholders.
Four other shareholder proposals at the Microsoft meeting were turned down. However, Smith noted that one of them, calling for the company to report the median pay gap by race and gender, received a “significant number of votes.” This proposal was also submitted by Arjuna Capital.
“This proposal was, frankly, a good nudge,” Smith said. “You know, it’s been a good conversation. And so you will see us next year take more steps to publish globally our median pay gap data.”
Other shareholder proposals called on the company to:
- Halt sales of facial recognition technology to all government entities. This proposal was submitted by Harrington Investments and supported by the ACLU of Washington.
- Report on efforts to eliminate racial discrimination in employment caused by the disproportionate incarceration of Black and Latinx people. NorthStar Asset Management submitted this proposal.
- Report on the company’s lobbying activities, and how they align with its principles on artificial intelligence, public policy, human rights, and racial justice. The Congregation of the Sisters of St. Joseph of Peace and others submitted this proposal.
The full text of each resolution is available in the company’s proxy statement.
Update: In an SEC filing, Microsoft said the proposal on sexual harassment received 78% of the vote, and the proposal on the median pay gap received 40% of the vote.
The lobbying proposal received 38% of the vote. The facial recognition proposal received 4% of the vote, and the proposal regarding racial discrimination in employment related to incarceration received 14%.
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