Apple includes shareholder proposal on diversity in proxy statement, advises vote against
Apple, in its 2016 proxy statement issued to the Securities and Exchange Commission on Wednesday, decided to let shareholders vote on a contentious proposal that would force the company to add "people of color" to high-ranking management and its board of directors. The letter recommends a vote against, however, saying installed policies not only address diversity concerns, but are much broader in scope.
The proposal in question, referred to as an "accelerated recruitment policy," was submitted by investor Antonio Avian Maldonado II last year and seeks to compel Apple to add non-white members to the board and upper management. News of the proposal that would force Apple's hand made waves when it came to light last week.
Shareholders request that the Board of Directors adopt an accelerated recruitment policy requiring Apple Inc. (the "Company") to increase the diversity of senior management and its board of directors, two bodies that presently fails to adequately represent diversity ( particularly Hispanic, African-American, Native-American and other people of colour).
Apple says the proposed diversity plan, which concentrates only on senior management and the board, is inferior to an already implemented approach that seeks to integrate minorities into all facets of the company. Diversity is one of Apple's core values, the statement reads, and existing corporate policy works far beyond the upper echelons of Apple's corporate structure.
Indeed, Apple's — very public — strategy includes comprehensive outreach programs, including work with the Thurgood Marshall College Fund, a scholarships for students at historically black colleges and universities, and President Obama's ConnectED initiative.
Apple did not offer examples of how it plans to foster diversity among elite management moving forward.
"Our Board of Directors shares this commitment. Pursuant to its charter, the Nominating Committee of our Board of Directors actively seeks out highly qualified women and individuals from minority groups to include in the pool from which Board nominees are chosen, and this has been reflected in our most recent appointments to the Board," Apple said.
Deeming current efforts sufficient, Apple last year argued against including the submittal in its proxy statement, saying Maldonado's proposal is invalid because it constitutes micromanagement. In a letter in response, the SEC disagreed, but noted the decision on whether to include the submittal for shareholder vote ultimately falls to Apple.
"We believe that the proposal is unduly burdensome and not necessary because Apple has demonstrated to shareholders its commitment to inclusion and diversity, which are core values for our company," Apple said in its proxy statement.
According to Apple's most recent diversity report, the percentage of non-white employees has risen since 2014, with Asians and blacks seeing slight increases in representation. Data on upper management gleaned from Apple's EEO-1 report shows a positive one-percent change for Hispanics in top positions, but zero net change for other minorities.