Apple Shareholders Take On Diversity
Turns out investors are starting to make a business case for diversity.
“A more racially diverse tech sector would translate into stronger financial performances for companies,” says Michael Connor, the executive director of Open MIC, a foundation-supported nonprofit that works with shareholders to encourage more sustainable practices at publicly traded companies. Lately, Connor has been working the phones, talking with Apple investors in advance of the company’s annual shareholder meeting on Feb. 28 looking to get them to persuade the company to commit to a plan to hire more executives of color. “This is a critical time,” he says. “We’re reaching out to the company, too.”
And he’s got charts and graphs to back him up. Open MIC has just published a new report called Breaking the Mold, which looks at the lack of racial diversity in the tech industry. It’s a lengthy, readable and well-reported compilation of the best available research, studies, and practices that speak to race and inclusion in tech and beyond. There are four major recommendations everyone should consider:
- Collecting and publicly disclosing more detailed industry data on demographics (including aggregated gender and race statistics);
- Developing and publicly disclosing time-bound goals, with built-in accountability mechanisms;
- Linking employee compensation and incentives to the achievement of goals, especially for senior leadership staff; and
- Engaging white executives to make change.
Engaging executives has become Connor’s life’s work. He founded Open MIC nearly 10 years ago. In his earlier life, he was a journalist with the Wall Street Journal, ABC, and others, who discovered he had both an interest in transforming corporate behavior and important contacts in the socially responsible investing field. Over time, Open MIC has become a small but quiet force helping investors and shareholders — from massive institutional money managers and pension funds to individuals — ask publicly traded companies to do better. “We started with a range of issues, like online privacy, network neutrality, and broadband access to the internet, before we began addressing diversity,” Connor told raceAhead. “Our strength is setting the table for a discussion about policy.”
For his Apple quest, Connor has teamed up with Tony Maldonado, a funny and feisty Apple shareholder, who figured out on his own that he had every right to get the company to consider his ideas on how to make their business better.
“People don’t realize that you only have to have $2,000 worth of company stock to make a proposal,” Maldonado says, referring to the U.S. Securities & Exchange Commission’s rule 14a-8, that says shareholders are allowed to submit a proposal if they own at least $2,000 in stock (or 1% of the company) for a full year before the proposal is submitted. “I talked to some people, did my research and figured it out.”
Maldonado, who owns at least 645 shares of Apple stock, is a creative director in the music business, a New Yorker now based mostly in London. He noticed the company’s lack of diversity, specifically in their executive ranks, when he and his son were looking at the company’s website, plotting his future education and career strategy. “He said to me, ‘it’s just so vanilla, there’s not a single person of color on the leadership page,’” Maldonado says. “I thought it was odd. You go into an Apple store and it’s like walking into the U.N.” Maldonado calls himself a conservative realist and insists that this is a business thing, not a liberal thing. “The company can’t go into markets like India without diverse ideas,” he says by way of example. “Leadership on that has to trickle down from the top.”
In 2015, Maldonado submitted his first proposal asking the company to institute an accelerated strategy to place more people of color in high-ranking positions, the first shareholder letter to come with a specific recruitment demand. He also asked Apple CEO Tim Cook about diversity at their annual meeting. His proposal got 5.1 % of the shareholder vote, enough to allow him to re-submit again. You can read the proposal here.
Both Connor and Maldonado are hopeful that this year’s meeting will bring meaningful movement to the issue. But either way, says Connor, talking is good. “It shines a spotlight both outside and inside Apple,” he says. And although his focus is on shareholders, everyone matters. “Oftentimes it empowers people inside a company, people who agree with us,” he says.
We reached out to Apple for comment but did not receive a response.
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