APPLE INC. | Board policy at APPLE INC.

Status
6.45% votes in favour
AGM date
Previous AGM date
Proposal number
7
Resolution details
Company ticker
AAPL
Lead filer
Nia Impact Capital
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Technology
Company HQ country
United States
Resolved clause
Apple shareholders urge the Board to adopt a policy that, should holders of a majority of non-insider shares voted support a shareholder proposal (calculated by dividing (i) “For” votes by (ii) the sum of votes cast “For” and “Against”, minus the shares held by current executive officers and Board members as reported in the proxy statement), a Board member or members, identified by the Nominating Committee Chair, will be made available for a discussion with the proposal’s proponents within three months of Apple filing its Report on Form 8-K containing the voting results.
Whereas clause
n 1947, the Court of Appeals for the Third Circuit upheld the right of a shareholder to submit a proposal on shareholder approval of the auditor, stating that “A corporation is run for the benefit of its stockholders and not for that of its managers.”(1) The SEC’s Staff has made clear that “a cornerstone of shareholder engagement on important matters”(2) is the shareholder resolution process.

In our view, a high vote for a shareholder proposal indicates that investors believe insufficient attention has been paid by the company’s management or Board to the issue at hand.

Apple’s Corporate Governance Guidelines state that the Board of Directors oversees the CEO and senior management and “seeks to ensure that the long-term interests of shareholders are being served.” The Guidelines also state that “The Board believes that management speaks for the Corporation” and that it is only in “unusual circumstances” that individual directors will to be authorized to speak with investors or other stakeholders.

If Apple’s Board members are restricted in when they speak with stakeholders, this may undermine the Board’s ability to, per the Corporate Governance Guidelines, proactively “ensure that the Corporation is committed to business success through the maintenance of high standards of responsibility and ethics.”(3)

For example, in 2022, Nia Impact Capital (“Nia”) submitted a resolution requesting that the Board review Apple’s use of concealment clauses in the context of harassment, discrimination and other unlawful acts. The resolution received support from 50.4% of all shares voted “For” and “Against.”

Apple management had stated that it was “not aware” of the use of concealment clauses and that “Apple does not limit employees’ and contractors’ ability to speak freely about harassment, discrimination, and other unlawful acts in the workplace.”(4) However, shortly after this statement a former Apple employee went public with a severance agreement that Apple had asked her to sign which included non-disclosure and non-disparagement clauses related to workplace conditions.(5)

This discrepancy undermined Nia’s confidence in management’s representation of Apple’s use of concealment clauses. Despite the high vote showing that other investors shared these concerns and an explicit request made by Nia and other investors for a meeting, no Board member has agreed to a meeting.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Anima Sgr Against A vote AGAINST this resolution is warranted, as the company's existing board guidelines appear adequate to allow for oversight of shareholder engagement, and the company was adequately responsive to the proponents’ 2022 shareholder proposal.

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