Microsoft shareholders approve resolution calling for new insights into sexual harassment cases

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Microsoft CEO Satya Nadella, center, with (left to right) John Thompson, lead independent director; Amy Hood, chief financial officer; Brad Smith, president, and Brad Iverson, general manager of investor relations. (Screenshot via webcast.)

Microsoft pledged to release more data about sexual harassment cases inside the company after shareholders approved a resolution on the issue that cited, among other examples, allegations that surfaced earlier this year involving Microsoft co-founder Bill Gates.

In a Q&A session at the company’s virtual shareholder meeting, Microsoft President Brad Smith gave a preview of the types of data to be released: Microsoft received 51 complaints from employees in its recently completed fiscal year, and 47% of them were substantiated, he said. That compared to 142 complaints the prior year, 49% of them substantiated.

The decline in the total number from year-to-year probably resulted from the shift to remote work, he said.

Smith called it an issue of “enormous importance” to Microsoft and its employees. The company has been sharing more data internally, and now it will release new reports externally, he said.

“There are new steps that we are going to take that we were thinking about, and I think that the resolution and the dialogue we’ve had has helped us advance our decision making,” he said.

The shareholder proposal was submitted by Arjuna Capital, presented during the meeting by Natasha Lamb, the firm’s managing partner.

“Reports of Bill Gates’ inappropriate relationships and sexual advances towards Microsoft employees have only exacerbated concerns, putting in question the culture set by top leadership, and the board’s role holding those culpable accountable,” the resolution said, in part. “Investors are concerned Microsoft may be facing a culture of systemic sexual harassment, putting at risk the company’s ability to attract and retain talent.”

This was the resolution approved by shareholders.

Shareholders urge the Board of Directors to release a transparency report (at reasonable expense, omitting confidential or privileged information) to shareholders assessing the effectiveness of the company’s workplace sexual harassment policies, including the results of any comprehensive, independent audit/investigations, analysis of policies and practices, and commitments to create a safe, inclusive work environment.

Microsoft’s board had recommended a vote against the shareholder proposal, calling it “unnecessary because Microsoft has adopted plans to begin annual public reporting in this fiscal year on Microsoft’s implementation of our sexual harassment and gender discrimination policies.”

It’s common for companies to oppose shareholder proposals, and uncommon for them to be approved by shareholders. Four other shareholder proposals at the Microsoft meeting were turned down. However, Smith noted that one of them, calling for the company to report the median pay gap by race and gender, received a “significant number of votes.”

“This proposal was, frankly, a good nudge,” Smith said. “You know, it’s been a good conversation. And so you will see us next year take more steps to publish globally our median pay gap data.”

This proposal was also submitted by Arjuna Capital.

The vote tallies are scheduled to be released later today.