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March 14, 2023

Apple shareholders reject conservative proposals on its diversity policy and China

Apple logo outside French store
Apple has been asked by a US shareholder to launch an audit of its ‘impacts on civil rights and non-discrimination’. (Photo: Regis Duvignau/Reuters)

Apple shareholders have voted against proposals put forward by conservative US groups that consider the tech giant’s diversity and inclusion policies as “bigoted against men” and called for an audit of its dealings with China.

Shareholders at tech giant Apple’s annual general meeting have heeded the company’s advice and heavily rejected five proposals covering areas including diversity, its exposure to China and gender pay gaps.

The nature of the proposals put forward by conservative US groups reflects a surging anti-ESG movement in the US, which has forced a rethink among some major corporations over how they describe their environmental, social and governance activities.

A proposal filed by the conservative National Center for Public Policy Research asked Apple to launch an audit of its “impacts on civil rights and non-discrimination”. This review should not rely solely on “left-leaning organisations” and should also consult rightwing civil rights groups, it said.

It warned that companies “have been found to be sponsoring and promoting overtly and implicitly discriminatory employee-training and other employment and advancement programs”, which it said creates reputational, legal and financial risk. 

“Apple does in fact take [diversity, equity and inclusion] seriously,” National Center for Public Policy Research associate Ethan Peck said in a statement before the vote. 

“But that is exactly the problem, because although DEI sounds so benign, in a very Orwellian sense it translates to the opposite,” he continued.

“DEI is overtly bigoted against men, white people and straight people by falsely assuming that they are inherently — and irredeemably — racist and sexist oppressors.”

In recommending that shareholders vote against this proposal, Apple said that the proponent “mischaracterises Apple’s commitment to inclusion and diversity by suggesting that our policies promoting these goals are discriminatory”.

Human rights allegations

Apple shareholders also voted against forcing the company to conduct a “communist China audit”, as proposed by the National Legal and Policy Center.

The proposal asked Apple to report every year “on the nature and extent to which corporate operations depend on, and are vulnerable to, communist China, which is a serial human rights violator, a geopolitical threat, and an adversary to the US”. 

China has been internationally condemned for human rights abuses against Uyghur Muslims, which it denies.

Speaking at the meeting, NLPC director Paul Chesser pointed to the disruption caused to Apple’s supply chains by China’s “zero Covid” approach and its use of lockdowns.

“It left [Tim] Cook scrambling to move production to other countries like India and Vietnam, but alas it did not alleviate the losses to the company and its shareholders,” Chesser said.

Before the meeting, Apple said that it had already provided the information requested by the proposal. 

“We are deeply committed to respecting internationally recognised human rights in our global business operations and maintain leading policies and processes on supplier conduct,” Apple said.

‘Overly prescriptive’

Both proposals failed to receive the full backing of the Apple Together trade union. It did, however, support the objectives set out by the China resolution, withholding its full support solely due to the nature of the organisation that submitted the proposal.

The union recommended that shareholders vote in favour of the remaining three proposals — all of which were ultimately defeated.

Nia Impact Capital was lead filer for a resolution that called for the Apple board to be available to discuss any proposal that wins the support of a majority of non-insiders’ shares within three months of the company filing its voting results.

Last year, Nia Impact Capital filed a resolution asking for a review of Apple’s use of concealment clauses regarding harassment and discrimination. It received the support of 50.4 per cent of all shares that voted for and against.

Apple said that Nia Impact Capital’s latest proposal was “overly prescriptive and would detract from the board’s ability to effectively discharge its duties by restricting when, how and through whom shareholder engagement is conducted”.

Before the vote, Apple Together said that the proposal “would hold the company accountable to the shareholders”.

Arjuna Capital, meanwhile, proposed the measurement of median pay gaps across race and gender, while shareholder activist James McRitchie requested reforms that would enable shareholders to nominate more directors.

Apple Together recommended voting against Apple’s proposed executive pay package, and also called on shareholders to oppose the nomination of Johnson & Johnson executive chair Alex Gorsky, Uber chair Ron Sugar, and BlackRock co-founder Sue Wagner to the board.

The meeting approved a 40 per cent cut to chief executive Tim Cook’s pay, with Cook’s target total pay sitting at $49mn for 2023. All board members were re-elected.

Apple did not respond to a request for comment.

A service from the Financial Times