Apple vows to diversify its board

Apple, facing behind-the-scenes pressure from some shareholders to add more female directors and executives, has taken a step to address the criticism and diversify its board. The world's most valuable company recently added language to its corporate charter vowing to diversify its board. The move follows objections from shareholders Trillium Asset Management and the Sustainability Group, who said they're disappointed that the iPhone maker has only one woman on its eight-member board, and one incoming female member of the executive team that reports to chief executive officer Tim Cook. The shareholders met with Apple representatives several times in the past few months and said they would bring the issue to a vote at a February 28th shareholder meeting. They said they backed off after Apple tweaked its corporate charter, in which the company said it promised to consider women and minorities as board candidates, without making any specific commitments.

“There is a general problem with diversity at the highest echelon of Apple,” said Jonas Kron, director of shareholder advocacy at Boston-based Trillium, which manages $1.3 billion. “It’s all white men.”

The new language shows how scrutiny of Apple's diversity practices has now ramped up after other Silicon Valley companies faced questions over their male-dominated leadership ranks. Social-networking companies Facebook and Twitter were criticised leading up to their initial public offerings for not having any female directors.

Only 17 per cent of board seats on Fortune 500 companies and 15 per cent of executive officer positions were held by women in 2013, according to a report last month by Catalyst, a non- profit researcher. “There is a lot of room for improvement,” said Larisa Ruoff, who runs shareholder advocacy and corporate engagement for the Sustainability Group, which manages more than $1 billion as part of Loring Wolcott and Coolidge Trust .

“We live in an increasingly complex global marketplace, and the companies that can hire, attract and retain women and people of color are better equipped to capitalize on global opportunities and avoid missteps that may not be apparent to a more homogeneous group.”

The Sustainability Group said it sent a letter to Apple in August, seeking to get the company to address diversity issues. The group also filed a proposal to be considered at Apple’s February shareholder meeting that would ask the company to make adding women and people of color a priority, and to report back to investors on how it’s making those changes.

Andrea Jung, the former CEO of Avon Products, is the lone woman and person of color on Apple's board, which otherwise includes seven white men all over the age of 50. Angela Ahrendts, the former CEO of Burberry Group, will be the only woman on the company's executive team when she takes over Apple's retail operation in the first half of this year.

Bloomberg