Google Employees and Investors Joined Forces to Demand More Diversity. Why Even That Novel Approach Failed.
Google—whose workers recently got it to drop a Pentagon deal due to the possibility that Google AI could help mark people for death—is facing more pressure from below. But this time there’s a new twist.
Employees and investors yesterday teamed up to urge Google parent Alphabet to tie executive pay to the meeting of corporate diversity goals. The shareholder proposal, from Zevin Asset Management, was voted down at Alphabet’s shareholder meeting along with all the other proposals. However, even though it failed, it was notable for the way in which it showed investors stepping in to back up employee concerns.
The problem at hand is real, too. As the proposal stated:
“Our Company remains predominantly white and male, especially in technical and leadership roles. Over the past four years, the Google division has only improved representation of women in its workforce by one percentage point (from 30% to 31%). In the same period, positions for all underrepresented people of color in the Google workforce have only increased from 9% to 10%. Among Google’s top 31 executives in 2016, there was only one underrepresented person of color and only four women.”
“Clearly, Alphabet’s management approach to inclusion in its key Google subsidiary lacks serious momentum and directionality. As with any other major strategic challenge, investors should not be satisfied with one-percent progress in four years.”
Software engineer Irene Knapp backed up the Zevin proposal by telling shareholders that the lack of executive leadership on this front “fundamentally hurts the quality of products Alphabet can deliver to users” and “has left many of us feeling unsafe and unable to do our work.”
Regarding that last point, the Zevin proposal cited multiple recent reports about employees quitting over racial discrimination, employees being harrassed after their personal information was posted on far-right websites (they blame coworkers), and a soon-to-depart coder allegedly being told by a senior executive that “if the majority of your coworkers are Nazis, it is better if you don’t know about it.”
Zevin’s proposal didn’t just address the diversity issue, instead rolling it into a wider argument about corporate sustainability. It also referenced Google’s multiple antitrust investigations in Europe, and with good timing as it turned out—the Financial Times reported yesterday that the European Commission will find against Google in its Android antitrust probe “within weeks.”
Google founders Larry Page and Sergey Brin may hold supervoting rights, making these proposals untenable in practice, but they can’t stop this dirty laundry being aired in public—particularly when employees and shareholders join forces. At some point, something has to give. And not just a “more inclusive vegan salad” emoji.
A version of this story first appeared in CEO Daily, Fortune’s daily newsletter on succeeding big in business. Subscribe here.