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Friday
Jan222016

Is Apple's Workforce Sufficiently Diverse? A Shareholder Proposal Says No, But I'm Skeptical

Silver Apple Logo WhiteIs Apple's workforce sufficiently diversified?

Antonio Avian Maldonado II, a shareholder, says "no." He's submitted a shareholder proposal to be voted on at Apple's next shareholder meeting calling on the corporation to adopt an "accelerated recruitment policy" to increase diversity.

In its proxy statement, which contains the proposal and Apple's response, Apple urges shareholders to vote "no" on the proposal. It is now receiving criticism for doing so.

But is the criticism fair? At the risk of further aggrieving the perpetually-aggrieved, I see scant reason to think so.

Apple's overall United States workforce is 54 percent white. The USA is 77.4 percent white; if everyone of Hispanic heritage is deducted, it is 62.1 percent white. Apple's leadership is 63 percent white. So Apple's American workforce is less white than America; its leadership is as well unless everyone with Hispanic ancestry is discounted, in which case, the leadership numbers, in terms of white executives, almost exactly match the population's.

Maldonado is quoted saying Apple's board is "a little bit too vanilla." He's more comfortable than I am in judging people based on their birth characteristics.

Apple's board has only eight members. That's small. Anytime you have a group of just eight, the odds of it matching some pre-determined racial/ethnic/gender mix is unlikely. Even so, with one black member, Apple's board is 12.5 percent black (about 13.2 percent of Americans are black).

When it comes to women on Apple's board, at first glance, with two members or 25 percent, women are underrepresented. But women earned only about 18 percent of all U.S. bachelor's degrees in computer science in 2010, and about the same in engineering. By this measure, Apple actually has more women on its board than it might.

The board is 75 percent white.

But again, a sample size of eight is too small for conclusions, and anyone who knows business knows that many of the most influential executives at any corporation are not necessarily on the board of directors. Indeed, boards sometimes are criticized for rubber-stamping what executives want.

It's worth noting, and Apple does, that over the last year 35 percent of Apple's new U.S. hires were female, 19 percent were of Asian ancestry, 13 percent were of Hispanic ancestry, and 11 percent were black.

Some Apple critics, such as the business publication Quartz, claim "studies have found that companies with diverse boards typically see higher financial returns." But Quartz only linked to two studies for this broad statement.

One of these examined boards only for gender mix and for the number of members who were foreign-born, not race or ancestry, and even then, it said, "We acknowledge that these findings, though consistent, aren’t proof of a direct relationship between diversity and financial success."

The other, a four page study (of which two pages are graphics and a third is recommendations and information about the sponsor), examined the return on investment (ROI) of corporations with women on their boards versus those without in three nations (the U.S., U.K. and India; we aren't told why these three were selected), noted that the firms with women on the board had greater ROIs, and apparently just assumed the women made the difference. I think we all know what can happen when we "assume."

Maldonado's proposal asks "the Board of Directors [to] adopt an accelerated recruitment policy... to increase the diversity of senior management and its board of directors, two bodies that presently fails [sic] to adequately represent diversity (particularly Hispanic, African-American, Native-American and other people of colour)."

This is vague (is Apple supposed to put more non-whites and females in senior management and its board, or is it merely supposed to examine the resumes of/interview more non-whites, Hispanics and females?), and vagueness can get a proposal disqualified at the Securities and Exchange Commission, but for some reason Apple's attorneys failed to make this argument when it asked the SEC to allow it to leave Maldonado's proposal off its proxy statement, so I have no idea if the SEC would agree with me.

Although I have been an Apple customer for thirty years, I am not a blind lover of everything Apple says and does (and there are many people who are!). Maldonado's proposal is #6 on Apple's proxy statement; one from us is #7. Apple fought us at the SEC (we won), just as it did Maldonado. But I am exasperated by what appears to be increasing arguments that there is something wrong with white men, just because they were born white and male. Apple's U.S. workforce is already less white than the U.S. and it's not Apple's fault that women are less likely than men to CHOOSE (a voluntary action!) computer science and engineering careers. If Apple has some bias against non-white non-males -- and no one appears to be alleging that -- it should be addressed and eliminated. Short of that, Apple should choose its executive team and board based on what's between people's ears (which can include knowledge about different population groups), not their skin color, gender, the nations their ancestors lived in or other characteristics of birth.

It's clear Apple already actively recruits minorities and women, and it goes further, by such activities as making donations to the STEM programs at historically-black universities. This almost certainly will increase the pool of black executives for the tech sector. These activities should be applauded. But if a white male happens to be the best applicant for any particular position, Apple should not hold his race and gender against him.

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