Facing pressure from its shareholders, the world’s most valuable company is taking a first small step to prioritize diversity in its top ranks with a new statement in its corporate board charter to actively seek out women and individuals of color.
The charter now reads, “The nominating 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.”
Apple added the new language after months of pressure from two major shareholders, Trillium Asset Management and Sustainability Group, for not doing enough to diversify. “It’s all white men,” Trillium Director of Shareholder Advocacy Jonas Kron said. Apple’s board includes eight people, seven of whom are white men over age 50. There are two exceptions to that rule in Apple’s upper ranks: Andrea Jung, former CEO of Avon and a woman of color, sits on the board and Angela Ahrendts will be the first woman to join Apple’s executive team.
Apple’s move has thwarted a threatened shareholder vote that would have come in February, but it is still far from making real changes, like actually appointing women and minorities.
Homogeneity is a problem beyond Apple. For years the percentage of women occupying Fortune 500 company board seats has hovered at 17 percent.
Apple’s new language may put it in compliance with 2010 Securities and Exchange Commission rules that require companies to disclose diversity considerations when selecting their boards, but few companies have followed them. One count found only 12.5 percent of companies contain a statement about diversity in the nominating process; 60 percent do not fully comply with the SEC requirements.
Before naming its first woman to an otherwise all-white male board, Twitter’s CEO implied he could not find qualified women or minorities to serve on Twitter’s board. He compared the mission to increase diversity to “checking a box.”
However, diverse boardrooms do not just serve as an SEC checkmark, they improve results. Three separate studies found gender-diverse boards to outperform male-only boards for bigger profit and higher stock prices. A fourth study found another positive byproduct of having women on the board: They fuel even more diversity.