An Apple, an Orange and Maybe a Kiwi a Day Keeps the Activist Away (and Makes for a Stronger Board)


With proxy season just around the corner, I would be remiss if I did not (once again) remind Nominating and Governance Committees that it is time, and it is not too late, for you mix it up a little . . . or a lot. Think fruit salad: a big, colorful, healthy fruit salad. That’s what Apple’s board of directors has recently vowed to do. In its 2014 proxy statement, Apple has announced that its “[Nominating and Corporate Governance Committee] is committed to actively seeking out highly qualified women and individuals from minority groups to include in the pool from which board nominees are chosen.” Yeah! One good Apple may unspoil the bunch. . . .

But wait a minute. Before we give Apple a standing ovation for its board of directors’ forward-thinking efforts to pursue corporate governance with the same vim and vigor with which the company pursues the development of technology and its product lines, let’s be clear: Apple had uninvited cooks in its kitchen pushing Apple to spice things up a little. Two investor groups, the Sustainability Group and Trillium Asset Management, met with Apple representatives several times this past fall, stating their displeasure and disappointment that Apple had only one woman on its eight-member board. The shareholders threatened to bring the issue to a vote at a February 28 shareholder meeting. Ultimately, they backed off after Apple added language in November to its Nominating and Corporate Governance Committee charter, promising to consider women and minorities.

In a December blog, I asked the boys if they were listening. Study after study has shown that companies with boards of directors with three or more — YES, THREE OR MORE — women have better financial performance, higher returns on equity and greater returns to shareholders. They even pay less for mergers and acquisitions. I challenged ISS and Glass Lewis to stir the pot. Well, it appears that, with or without proxy advisory services, shareholders are hearing the message loudly and clearly: Women and minorities need to be and should be on the menu . . . Er, the slate.

As we have discussed before, activists are not going away any time soon. Their (and non-activist shareholders’) overwhelming desire is for your company to make money on your stock. Be proactive. Be preemptive. Be prepared.  Make a vow to pursue diversity. Now.


Topics:  Apple, Board of Directors, Corporate Governance, Diversity, Nominee Directors, Sex Discrimination

Published In: Business Organization Updates, General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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