Microsoft CEO Satya Nadella looks on during a panel session at the World Economic Forum in Davos, Switzerland, on Jan. 17, 2017.
Jason Alden | Bloomberg | Getty Images
Microsoft shareholders on Tuesday approved a proposal asking the board to publish a report on the effectiveness of its workplace sexual harassment policies in a rare vote of support for an activist initiative. The board of the software and hardware maker had recommended that shareholders vote down the proposal, but it received 77.97% of all votes, according to a regulatory filing.
The decision comes a year and a half after Microsoft co-founder Bill Gates stepped down from his seat on the company's board following a report that Gates had tried to start a relationship with an employee in 2000, prompting a board investigation.
Like other large companies, Microsoft has also sought to adjust its workforce following the ascent of the MeToo movement, as some employees have spoken out about experiencing harassment at the company. It has increased the percentage of women among its ranks and fired some employees following complaints.
"While Microsoft has conducted prior internal investigations into sexual harassment and gender discrimination allegations, it has failed to report transparently on any independent investigations to employees and investors," the shareholder proposal began, according to the company's most recent proxy statement. "To avoid legal and reputational risk and maintain shareholder value, Microsoft must create a culture of accountability and transparency, protecting employees from harassment and discrimination."
The proposal asked for details on of investigations on executives, including Gates, as well as the number of cases the company has looked into and how they played out.
Microsoft said it had already made plans to begin issuing reports each year on its implementation of harassment and discrimination rules, an effort that it said would largely cover the gist of the shareholder proposal. That includes details on the number of harassment cases, the percentage of them the company can substantiate and the ways it responded.
Arjuna Capital, which regularly files shareholder proposals, said that Microsoft's plans did not go far enough.
"The company's pledge to begin annual public reporting on sexual harassment and gender discrimination allegations ignores the need for reporting on independent and executive-level investigations," Natasha Lamb, co-founder and managing partner at Arjuna Capital, wrote in a letter to investors.
Correction: Microsoft has increased the percentage of women in its ranks, not the percentage of men.