How we engaged with a one of the world’s largest technology companies.
Background
Apple Inc. is one of the world’s largest technology companies, with a current market cap above $2 trillion, and is a global leader in technology innovation, renowned for its cutting-edge hardware and software products, seamless ecosystem and commitment to design excellence, privacy and user experience.
We encouraged the company to address potential civil rights impacts from the use of machine learning algorithms embedded in its products and services,
Our engagement
In order to enhance the board’s effectiveness in overseeing human capital management in the interests of long-term value creation, we requested that the company conduct a third-party assessment covering business risks such as avoiding liabilities associated with discrimination and ensuring fair treatment of its workforce, customers and communities (Q1 2022). In the United States this is often referred to as a “civil rights audit”. We recommended support for a 2022 shareholder proposal for such a report that passed with 54% support. We asked that the report include, at minimum, civil rights liabilities in the workforce such as business practices which minimize the risks and expenses of discrimination in the workplace, including sharing what it would do differently in light of sexual harassment complaints. We also encouraged the company to address potential civil rights impacts from the use of machine learning algorithms embedded in its products and services, consistent with the EOS Digital Rights Principles.
In 2022, at the company’s request, we also provided feedback on its ESG Report. We pointed to opportunities to improve human capital management oversight and disclosure, including how the company could benefit from describing areas of difficulty where it had not met its own values and aspirations, particularly around the potential liabilities and impact on employee productivity associated with ongoing allegations of sexual harassment.
Prior to its publication in 2023, the company assured us that it was addressing the audit thoughtfully and recognized it would become an example that would influence other companies. We note the significant contribution of the company’s talented, experienced, and highly skilled employees to its financial success. We reiterated in 2024 that its civil rights practices should include an increased focus on the rights of children and how best to protect them, pointing to potentially material legal and regulatory risks.
In Q3 2024 and Q1 2025, we reiterated to the company that the audit provided opportunities to deepen the integration of inclusion practices into the organization. For example, we continued to probe how Apple plans to implement audit recommendations that intersect with the EOS Digital Rights Principles, such as further coordination of the company’s existing efforts to consider civil rights risk related to its core business operations, including in product design and development. We also continued to encourage the company to prioritise the rights and safety of children and other vulnerable persons.
Changes at the company
Apple completed a third-party civil rights audit in 2023. The published report addressed products and services, workforce, customers and communities and laid out 40 recommendations.
These included suggestions to consider enhancing the company’s staff “AfterCare” program to include monitoring the aggregated retention, promotion progression, and attrition rates of employees who make complaints of workplace misconduct. The recommendations also suggested the company analyze customer feedback about potentially inappropriate or discriminatory employee conduct, such as sexual harassment, received through its staff survey, executive escalations, or other channels to identify potential trends regarding the incidence of misconduct.
We believe the audit provided the board with additional information that may help enhance oversight of corporate culture and management of company business risks, such as workplace behaviours and algorithmic bias, to the benefit of long-term shareholder value.
Further, the 2023 proxy clarified that the compensation committee had in practice been responsible for overseeing human capital and the 2024 proxy subsequently referred to it as the compensation and people committee, more clearly indicating board oversight of human capital issues.
