Apple shareholders approve a civil rights audit and investigation of the risks of its NDAs

At Apple’s annual shareholder meeting, investors in the company had more to consider than just how much money CEO Tim Cook and other executives stand to make — last year, the compensation for running a $2 trillion company added up to nearly $99 million for Cook. Instead, certain shareholder proposals brought up issues with social and cultural impact, like addressing forced labor, pay equity, and employee NDAs. On Friday, for the first time in years, two proposals actually passed (via CNET).

Bloomberg reports shareholders (unsurprisingly) opted to re-elect the same board of directors and approved the executive pay package outlined in the 2022 proxy statement. They also followed Apple’s recommendation in voting on eight of the ten shareholder proposals presented, as noted in an SEC 8-K filing (pdf).

One of the two measures passed was proposal number 10, which focused on non-disclosure agreements, with support from Nia Impact Capital, the Transparency in Employment Agreements (TEA) coalition, and Silenced No More co-sponsor Ifeoma Ozoma. It pushed Apple to prepare a report on potential risks from its use of concealment clauses (non-disclosure agreements) in the context of harassment, discrimination, and other unlawful acts.

Shareholders of Apple Inc. (“Apple”) ask that the Board of Directors prepare a public report assessing the potential risks to the company associated with its use of concealment clauses in the context of harassment, discrimination and other unlawful acts. The report should be prepared at reasonable cost and omit proprietary and personal information

In response, Apple said it has added language to all separation agreements for US employees, explicitly noting that non-disclosure clauses do not prevent them from discussing “harassment or discrimination.” However, not all Apple’s employees are in the US or California, where the Silenced No More Act is now the law. The shareholders want the company to add that language to its employment agreement where they argue it provides more legal protection than simply sitting in the Business Conduct Policy.

Preliminary voting announced during the call showed shareholders slightly favored approving the measure, with 49.3 percent of votes in support vs. 49.24 percent against it, but as Marketwatch notes, the number of abstentions prevented it from meeting the threshold of fifty percent or more in favor, at first. However, as reported by Apple’s 8-K filing with the SEC, votes that came in on Friday pushed the in-favor crowd above fifty percent and got it approved.

Nia Impact Capital founder and CEO Dr. Kristin Hull said in a statement about the victory that “NDAs make sense when we need to protect intellectual property or competitively sensitive information. They do not, however, make sense for cases of harassment or discrimination as they mask issues from other employees and investors.”

The other one where shareholders broke with the company’s recommendation is proposal number nine, titled Civil Rights Audit. It asked for the Board of Directors to initiate an independent audit measuring the “impact of Apple’s policies and practices on the civil rights of company stakeholders,” with results and recommendations posted publicly on Apple’s website.

RESOLVED that shareholders of Apple Inc. (“Apple”) urge the Board of Directors to oversee a third-party audit analyzing the adverse impact of Apple’s policies and practices on the civil rights of company stakeholders, above and beyond legal and regulatory matters, and to provide recommendations for improving the company’s civil rights impact. Input from civil rights organizations, employees, and customers should be considered in determining the specific matters to be analyzed. A report on the audit, prepared at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on Apple’s website.

Apple opposed the measure, saying it already fulfilled the proposal’s objectives through commitments to inclusion and diversity, risk assessments, transparent public reporting, and other measures. Shareholders apparently weren’t convinced — perhaps they’ve read what employees have had to say about its company culture or are unsettled by recent leaks — and passed the measure with 5,125,278,012 voting for it, vs. 4,445,469,491 voting against.

The SOC Investment Group was one of three parties that submitted the measure, saying “Apple’s Reputation as an Inclusive and Equitable Changemaker is at Risk,” and mentioning that other companies like Starbucks, Airbnb, and Facebook had conducted similar audits. In a tweet Friday, the group said, “A properly conducted Civil Rights Audit will help the company effectuate the reputation that Apple has built of being an inclusive and equitable company.”

Even once approved, the proposals are non-binding, but in a statement to CNBC, SOC Investment Group executive director Dieter Waizenegger said shareholders typically hold the company’s board to account when something passes. In a conversation with The Verge, Dr. Hull said the same, hoping that this result would push Apple to do the work necessary to maintain a good reputation and push back against potential abuses in the workplace.