In the wake of sexual harassment allegations against a now former Amazon executive, a group that advocates for investors sent a letter last week to the online giant urging it to improve the diversity of its senior executive ranks, among other things.
The letter is the second filed by CtW Investment Group, which works with union-sponsored pension funds, and a sign that some investors are growing concerned about the reputation hit companies could face from the recent flood of harassment headlines.
“We believe that the evidence suggests that Amazon’s gender-diversity gap creates significant risks for long-term shareholders, and that further delays in rethinking Amazon’s approach to human capital management may have dire consequences,” the organization’s executive director, Dieter Waizenegger, said in the letter, which is addressed to Amazon Chairman and Chief Executive Jeffrey P. Bezos.
The letter also cites the perception of Amazon as “an excessively high-pressure workplace” and calls for the board to take a number of steps, from setting targets for gender diversity to having a labor-law expert review employment contracts. CtW, which said the pension funds it works with hold about 1 million Amazon shares, or 0.2 percent, also plans to submit a shareholder resolution. It is not clear whether the proposal would become part of Amazon’s next proxy statement, which is required of a firm when soliciting shareholder votes. Companies can request that the U.S. Securities and Exchange Commission let them exclude proposals if they pertain to “ordinary business operations.”
Richard Clayton, CtW’s research director, said that one of the company’s concerns with Amazon was the time lag between 2015 — when producer Isa Hackett said she made complaints to the company about behavior by former executive Roy Price — and this October, when Price resigned from Amazon after being suspended by the company. “Why was there a two-year delay?” Clayton said. “We’d want to hear the board explain why that happened.” An e-mail to a lawyer who is reported to represent Price was not immediately returned.
The letter also cites the number of women Amazon has in senior executive roles, compared with other tech companies, and asserts that could have an impact on how the company addresses allegations.
An Amazon spokesman declined to comment on the letter. In a statement previously reported by the Hollywood Reporter, where Hackett described her allegations, an Amazon spokesperson said “we take seriously any questions about the conduct of our employees,” and “we expect people to set high standards for themselves; we encourage people to raise any concerns and we make it a priority to investigate and address them.”
In its letter, CtW urged the board to “promptly commit” to greater diversity among senior executives, setting specific targets for how many senior women it would add. It also asks Amazon to create a Stakeholder Advisory Council that would meet on sustainability issues including sexual harassment, have a labor-law expert review employment agreements, and give more independence and authority to the company’s nine “affinity groups” — networks of employees such as women in engineering or LGBTQ workers.
It also asks that the company aim for gender parity on its board — a rare feat in corporate America. While Amazon has a greater percentage of women on the board than Apple, Facebook or Alphabet (three of Amazon’s 10 directors are women), CtW suggests that adding more women would “significantly enhance the credibility of Amazon’s commitment.”
CtW’s letter to Amazon is the second it has sent as sexual harassment headlines have piled up against powerful figures in media and business, and Clayton said it is “actively considering” sending letters to other companies, though nothing is definitive yet. Following the sexual harassment scandal at Fox News, CtW sent an October letter to 21st Century Fox, charging that the board failed to “effectively address the longtime ethics crisis” and pressing it to refresh its lineup of directors.
In a response to CtW, the media giant said in a letter that the company “has acted swiftly and decisively to address workplace civility matters at Fox News,” including installing new leadership and new human resources executives, changing the reporting structure and adding an enhanced training program.
So far, investors have not been pushing many proxy resolutions focused on corporate harassment policies, and it’s not expected to be a big factor during next year’s annual meeting season, according to the research arm of proxy adviser Institutional Shareholder Services. But that doesn’t mean investors aren’t concerned about issues related to gender. Proposals on gender diversity on the board, more broadly, have been growing in recent years, from just seven in 2012 to 37 this year.