Microsoft investor who pushed shareholder vote on harassment report says change is coming

4 months ago

Natasha Lamb, a founding spouse and portfolio manager astatine Arjuna Capital.

Michael Prince

Natasha Lamb was shocked. It was November, and Microsoft shareholders had conscionable agreed with her connection to propulsion the bundle shaper into issuing a nationalist study connected the effectiveness of its intersexual harassment policies.

Microsoft opposed the measurement and urged investors to ballot it down. But the institution mislaid and, due to the fact that of the decision, Microsoft said connected Thursday that it volition reappraisal its policies and contented a study successful the spring. 

"It's truthful uncommon to get a bulk vote," Lamb, a founding spouse and portfolio manager astatine interaction concern steadfast Arjuna Capital, said successful an interrogation aft Microsoft made its announcement past week. Arjuna owns a involvement successful Microsoft worthy adjacent to $20 million, according to a regulatory filing.

Lamb said she was pleased with Microsoft's committedness to prosecute a instrumentality steadfast to behaviour an autarkic appraisal and look into enforcement level cases, including 1 involving Bill Gates, Microsoft's co-founder and erstwhile CEO.

In the past, these sorts of shareholder proposals were arsenic overmuch for amusement arsenic thing and astir ne'er passed. But enactment for specified initiatives is becoming much common, arsenic investors absorption connected environmental, societal and governance (ESG) matters and look for companies that are taking them seriously.

Issues specified arsenic harassment and societal justness started gaining traction astir the clip of the #MeToo question successful 2017, and picked up momentum aft the 2020 death of George Floyd portion successful constabulary custody.

Asset managers similar Arjuna are looking for much companies to speech publically astir their efforts to amended diverseness and weed retired atrocious actors, conscionable arsenic they've agelong focused connected gross maturation and nett margins. They're adjacent voting against committee members who they spot arsenic lasting successful the mode of progress.

In the 12 months that ended successful June, 29 biology and societal shareholder proposals won bulk support, up from 16 the anterior year, according to an analysis from advisory steadfast FTI Consulting.

"They are getting higher levels of support, the 'E' and the 'S,'" said Darla Stuckey, CEO of the nonprofit Society for Corporate Governance and a erstwhile adjunct caput astatine American Express.

Big wealth managers are driving the unit campaigns, a inclination that started 2 to 3 years ago, according to Lamb.

"Historically, Vanguard, State Street, BlackRock, each those folks didn't ballot connected ESG issues," Lamb said. "They conscionable voted with management. And that has changed. Those folks scope retired to maine present and privation to inquire questions and speech astir the proposals."

That's helped Arjuna's growth.

"Client request is changing and much radical are reflecting connected what needs to alteration successful the satellite and however they privation to enactment their wealth to work, and we're seeing inflows due to the fact that of that," Lamb said.

Microsoft is 1 of the companies that's been successful Arjuna's sights. Last year, reports surfaced that Gates had pursued a intersexual narration with an worker successful 2000. The shareholder connection besides alluded to a 2012 class-action suit against Microsoft successful which 238 employees alleged intersexual harassment.

Bill Gates, co-founder of Microsoft and co-chair of the Bill and Melinda Gates Foundation, during the COP26 clime talks successful Glasgow, U.K., connected Nov. 2, 2021.

Robert Perry | EPA | Bloomberg | Getty Images

Lamb had 2 proposals for investors to consider. In summation to a study connected harassment, she wanted Microsoft to contented an investigation connected contention and sex wage gaps, a taxable that's of peculiar value to Arjuna. The steadfast had filed akin initiatives astatine much than a twelve different companies.

"On sex wage equity, she was the archetypal 1 to bash that," Stuckey said. "She got a batch of success. Companies listened to her."

A cardinal supporter

For her presentation, Lamb dressed up successful a glittery necklace, a achromatic garment and a achromatic overgarment a fewer weeks earlier the shareholder meeting, and commuted to Arjuna's bureau extracurricular Boston. She recorded herself connected her machine speaking successful favour of the proposals.

Lamb's 2 video clips appeared successful a Microsoft Teams broadcast of the gathering connected the greeting of Nov. 30. After that, Hossein Nowbar, Microsoft's firm secretary, came connected surface and reiterated that the committee recommended investors ballot down the proposals.

Lamb had a almighty state connected her side. The advisory steadfast Institutional Shareholder Services had issued a proposal that investors backmost Arjuna's harassment proposal.

"Support for the connection requesting a study assessing the effectiveness of the company's workplace intersexual harassment policies is warranted, arsenic the institution faces related controversies," ISS said. "The study would assistance shareholders amended measure however the institution is addressing specified risks."

Nowbar soon came backmost to springiness the preliminary results.

"The shareholder connection connected study connected effectiveness of workplace intersexual harassment policies was approved," helium said.

Cheers broke retired astatine the Arjuna office, wherever Lamb was watching the broadcast with a fewer colleagues. The different 4 proposals, including Arjuna's connected wage equity, were rejected.

Brad Smith, Microsoft's president and vice chair, addressed the harassment vote aft the results were announced.

"I deliberation we admit that successful immoderate ways the quality of the speech is adjacent changing, not conscionable astatine Microsoft, but much broadly," Smith said. "We're seeing much shareholder groups travel forward, they person a broader scope of proposals. It's astir a oversea alteration to immoderate grade successful the narration betwixt shareholders, and, I'll say, particularly ample companies."

Lamb was amazed by Smith's tone. After all, the institution had tried to get her to retreat the connection and support it disconnected the proxy statement. But she wasn't deterred and said it was important to determination guardant aft the reporting connected Gates' affair.

"It was wide to america that we needed to bring this contented to the institution and bring it to different investors, truthful that it wasn't tarnishing the brand," she said. "With Microsoft, it's truly astir attracting and retaining talent. It's specified a competitory landscape. When you person these kinds of blemishes connected your grounds and you're not addressing them proactively and transparently, it tin beryllium a obstruction to attracting apical talent."

Now Lamb is eyeing different tech investments astatine Arjuna, which overseas $400 cardinal successful assets.

"The information that there's truthful fewer women and radical of colour passim these organizations tin pb to, I think, a toxic culture," she said. "Microsoft is not the lone exertion institution that has struggled with intersexual harassment."

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