An activist shareholder proposal seeking to press Amazon.com (AMZN) to improve the diversity of its board in the wake of sexual harassment allegations against a former executive is expected to come to a vote at the internet giant's annual meeting expected in May.
At issue is a proposal introduced in November by the CTW Investment Fund, an organization that advises pensions for unions belonging to the Change to Win labor group, to have the ecommerce giant develop an accelerated recruitment policy so that it could improve the diversity of its board.
Already, three of Amazon's 10 directors are women, one of whom is the chairwoman of the nomination subcommittee.
However, Richard Clayton, research director at CTW Investment, said the fund together with the Service Employees International Union, decided to submit the nonbinding proposal after a former Amazon executive, Roy Price, resigned last year following sexual harassment allegations.
In an interview, Clayton said he would also like to see more women in senior executive roles, noting a report that said that of 16 most senior executives who report to Amazon chairman and CEO Jeff Bezos, only one is a woman. In addition, he points out that Amazon's own workforce demographics show that the proportion of women who are managers is well below Amazon's overall ratio of women to men.
"We were thinking about Amazon and gender diversity largely because of the revelations last fall around Amazon studios and sexual harassment allegations against then executive Roy Price and the gap in time between when complaints were made and when the company stepped in in response," Clayton said.
Clayton notes that a producer, Isa Hackett made complaints against Price in 2015, about two years before Price resigned in October after being suspended by the company.
In addition, Clayton said CTW Investment has engaged with other companies about gender diversity, including Rupert Murdoch's Twenty-First Century Fox Inc. (FOXA) , Netflix Inc. (NFLX) , and others that he has yet to announce.
The goal of the Amazon proposal, even though it is non-binding and doesn't require any action, is to convince the company to consider at least one person of color and one women in its pool of potential director candidates, Clayton said.
For its part, an Amazon spokesman said that the company is committed to diversity across the company, including its board and it seeks diverse candidates "at every level."
In addition, Amazon so far, hasn't filed a request with the Securities and Exchange Commission to block the measure for consideration by shareholders at the company's upcoming annual meeting. As such he Clayton he believed it would be considered for a vote, at a meeting that is likely to take place in mid-May.
Even so, it is possible that Amazon could take some action that would be enough for CTW and SEIU to withdrawn their propsoal. CTW and SEIU officials have engaged with Amazon about the proposal, and Amazon has indicated that they would be willing to make some changes to language around diversity, according to Clayton. However, Clayton added that Amazon so far hasn't provided specific language or offered up details about which corporate document would include any changes. For example, new language on gender diversity could appear in the company's bylaws or proxy statement. Finally, CTW is seeking to discuss the issue with an Amazon director, but the e-commerce giant hasn't agreed to that request, at least not yet.
Yaron Nili, assistant professor at the University of Wisconsin Law School, suggested that Amazon is doing better in terms of board diversity than most companies, especially those in the technology environment. However, he added that there is definitely room for improvement, noting that there are no women on Amazon's audit committee and its chairman, Bezos, and lead independent director, are both men.
Nili, recently authored a study that suggest that though women are gaining more representation on boards, they tend to have shorter tenures, rarely hold chairmanship positions of the board or subcommittees and are far behind men when it comes to obtaining lead independent director positions.
"There is still room for improvement on the substantive measures [at Amazon]," Nili said.
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