Apple Investor Presses for Diversity Among Senior Management and Directors

February 4, 2016

Apple Inc. investors are being asked to approve a shareholder proposal which would require the company to adopt an “accelerated recruitment policy” to increase racial and ethnic diversity among senior executives and its board.

The proposal will be presented and voted on at Apple’s annual meeting in Cupertino, California on February 26. It cites Apple’s “diminutive level of diversity and its painstakingly slow implementation” of initiatives aimed at correcting the diversity problem at senior levels.

According to data filed by Apple with the U.S. Equal Employment Opportunity Commission in 2015, of the company’s 103 executive and senior management positions, 3.9% were Black, 1% Hispanic/Latino, 11.7% Asian and 83.5% White. Six of the eight Apple directors are white.  

The shareholder proposal was filed by individual investor Tony Maldonado, London-based Executive Creative Director of IGRP | Insignia Entertainment, who says he decided to become personally involved with the diversity issue after talking with his teenage son about potential career paths for aspiring executives in the tech industry. Maldonado’s son noted the lack of top-level diversity at Apple.

“These appalling figures are demonstrative of the great lack of diversity and inclusion within the senior management group that should be a leading example for the rest of the employees at Apple,” said Maldonado. “To innovate and be more than merely relevant in business, the leadership team must include people from different backgrounds, who can provide different perspectives – essential qualities if Apple is to challenge all employees to put forward their best ideas and to Think Different.” 

The proposal specifically requests that Apple’s Board adopt “an accelerated recruitment policy” requiring that company increase the diversity of senior management and its board of directors, two bodies that the proposal says presently fail “to adequately represent diversity (particularly Hispanic, African-American, Native-American and other people of colour).”

In its response to Maldonado’s proposal, Apple has cited efforts to increase diversity throughout its entire workforce and argued 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.”

A lack of racial and gender diversity is an acute problem in the tech industry. According to theNew York Times, Google last year disclosed that its tech work force was 1 percent black, compared with 60 percent white. And Yahoo! reported that African-Americans made up 1 percent of its tech workers while Hispanics were 3 percent.

Arisha Hatch, managing director of campaigns at Color of Change, the largest online civil rights organization in the U.S., commented: "This is the kind of proposal that furthers the work that we want to see at Apple and all of the leading tech companies. Last year, when releasing its diversity numbers, Apple CEO Tim Cook stated that the company knows 'there is a lot more work to be done.' Apple has committed to donating scholarship funds to historically black colleges and universities, along with providing technology to underfunded schools. While we welcome this type of commitment, these are actions that require follow-up and innovative recruiting strategies, not just financial investment. Ultimately, we want to see Apple institute a policy that ensures that more of the students from low-income school districts and more of the engineers from Black colleges that it has invested in make it into the tech workforce. Approving this proposal would be a solid start." 

Michael Connor, Executive Director, of Open MIC, a non-profit organization that works with companies and investors on media and telecommunications issues, noted research which has found that companies with highly diverse executive teams had higher returns on equity and earnings performance than those with low diversity. “It’s critical that industry leaders such as Apple, and their shareholders, focus long-term on identifying solutions to this problem,” Connor said.