Tech firm redrafts board committee charter to prioritize female and minority board hires
Apple has taken its first steps to diversifying its ruling board after facing pressure from its shareholders, moving to avoid a shareholder vote later this year.
The concerted efforts of two of Apple’s largest shareholders – Boston-based Trillium Asset Management and Sustainability Group – targeted apparent shortcomings in the tech firm’s efforts to diversify the pool of applicants to its corporate board. Currently, Apple’s board is made up of eight people, seven of whom are white men over the age of 50.
Jonas Kron, director of shareholder advocacy at Trilium, says ‘there is a general problem with diversity at the highest echelon’ of Apple’s management. ‘It’s all white men,’ he points out.
Larisa Ruoff, Sustainability Group’s head of shareholder advocacy and corporate engagement, oversaw efforts to address diversity issues that started with a letter sent to Apple in August. The group has also pressured Apple to consider making board diversification a top priority, and for the idea to be seriously considered at the firm’s February shareholder meeting.
After five short meetings with Apple’s IR team, Ruoff explains, the two investment companies reached an agreement whereby an additional clause was added to the company’s board committee charter. It now outlines plans to seek female and other minority group members to join Apple’s board in the future.
The charter reads: ‘The nominating committee is committed to actively seeking out highly qualified women and individuals from minority groups to include in the pool from which board nominees are chosen.’
The change means Apple will not face a threatened shareholder vote in February, but Ruoff warns there is still room for improvement. ‘We live in an increasingly complex global marketplace, and the companies that can hire, attract and retain women and people of color are better equipped to capitalize on global opportunities and avoid missteps that may not be apparent to a more homogenous group,’ she notes.
A European Commission study last October found the proportion of women who served on the boards of European Union-listed companies rose to 16.6 percent, in the wake of new legislation in France, Italy and the Netherlands and a planned European draft law. A Thomson Reuters survey from April also found that companies with mixed-gender boards outperformed those with no women serving on them.