Microsoft shareholders backed a protest vote calling on the tech giant to publish more about how it handles allegations of sexual harassment in the workplace, in the shadow of the recent revelation that co-founder Bill Gates had a relationship with an employee.
This rare vote against management, taken during the tech giant’s annual shareholder meeting, brought an immediate promise of transparency from one of the world’s leading companies. Microsoft, however, did not commit to divulging details of individual cases or explicitly state that it would continue its handling of cases from previous years.
The surprise move by shareholders came after years of complaints from several employees that Microsoft had always brushed aside pervasive harassment allegations. Arjuna Capital, which filed the shareholder proposal that challenged management, said Microsoft’s human resources department had upheld only one of 238 lawsuits filed against the company in a 2012 class-action lawsuit for discrimination and harassment.
The tech giant announced earlier this year that its board had hired the services of an outside firm to investigate a decades-old “intimate relationship” between founder Gates and an employee. Gates resigned from the board before the investigation was complete.
The shareholder revolt is a major blow to Microsoft’s reputation with investors as a company focused on environmental, social and governance (ESG) issues. According to Bank of America, the technology giant has been the most heavily invested in US ESG funds since July.
Shareholder advisory groups ISS and Glass Lewis said investors needed to support the Arjuna resolution because the failure to effectively deal with allegations of sexual harassment would damage the company’s reputation and ability to hire top talent.
After the vote, Microsoft President Brad Smith said in a statement, “There are new steps we are going to take that we were thinking about. I think the resolution, and the dialogue we’ve had, has helped us advance our decision-making.”
Smith also said Microsoft would launch an independent review of how it handles harassment allegations and publish the findings, but he did not specifically say that the tech giant is open to recommendations to make changes.
Smith also said that despite the lukewarm support of shareholders on this particular issue, Microsoft would soon release more details about the company’s gender pay gap.