21 Feb 2019 Leading Conservative Investment Group Scores Major Victory Over Apple
Free Enterprise Project Resolution – Designed to Increase Ideological Diversity of Apple’s Board – Will Go to Shareholder Vote on March 1 Proxy Advisory Firm ISS Slammed for Hypocrisy and Bias in Refusing to Support Diversity Proposal
Washington, D.C. – Apple shareholders have a unique opportunity to deliver a resounding message that the liberal grip on Silicon Valley poses an unacceptable long-term risk to investors. The Free Enterprise Project (FEP), the nation’s leading voice for conservative-minded investors, urges Apple investors to seize this occasion by approving FEP’s “True Diversity Board Policy” shareholder proposal at the company’s March 1st annual meeting.
“True diversity comes from differences in thoughts, ethos and beliefs. And in the current business climate in which corporate America regularly engages in political issues, it is important for corporate boards to reflect a broad spectrum of ideologies,” said National Center General Counsel and FEP Director Justin Danhof, Esq., the author of the resolution. “Without such diversity of opinion, boards risk falling victim to groupthink, a major concern for long-term investors. Nowhere is this more of an issue than in liberal-leaning Silicon Valley.”
FEP’s proposal asks Apple to disclose to its investors the background of each of its board nominees. It notes:
…boards that incorporate diverse perspectives can think more critically and oversee corporate managers more effectively. By providing a meaningful disclosure about potential Board members, shareholders will be better able to judge how well-suited individual board nominees are for the Company and whether their listed skills, experience and attributes are appropriate in light of the Company’s overall business strategy.
True diversity comes from diversity of thought. There is ample evidence that the Company – and Silicon Valley generally – operates in ideological hegemony that eschews conservative people, thoughts, and values. This ideological echo chamber can result in groupthink that is the antithesis of diversity. This can be a major risk factor for shareholders.
FEP’s full proposal, and Apple’s response to it, are available on pages 55 and 56 of the company’s proxy statement.
Unfortunately, many institutional investors are being advised to vote against the proposal. America’s largest proxy advisory firm, Institutional Shareholder Services (ISS), is recommending that its clients reject FEP’s diversity initiative. However, last year, ISS publicly supported a liberal board diversity proposal presented to Amazon, causing the Seattle-based giant to adopt that resolution. That proposal also had the stated goal of avoiding groupthink but called on Amazon to interview a woman and an underrepresented minority for each open board seat.
“The left’s idea of board diversity, pushed by groups such as Service Employees International Union (SEIU), isn’t diversity at all. It’s racism and sexism. Not all women think alike based on the fact that they are women. Similarly, not all Asian or Latino or black Americans think the same based on their respective skin color,” said Danhof. “ISS supports racist and sexist board diversity policies but rejects our call for true diversity. That’s outrageous. ISS’s liberal bias and hypocrisy are on full display – and its clients should take notice.”
If Apple had its way, investors would not have had the opportunity to vote on FEP’s resolution. That’s because Apple twice petitioned the U.S. Securities and Exchange Commission (SEC), seeking to remove FEP’s proposal from its proxy statement and to deny the company’s investors the right to even consider the resolution. In its filing, Apple’s legal team argued that its shareholders simply wouldn’t be able to grasp FEP’s proposal.
“Apple wasted shareholder money in the hopes of avoiding even the possibility of breaking up the liberal power bloc that resides in its leadership. And in doing so, it also insulted its entire investor community. These actions prove why our policy request is so desperately needed at Apple,” added Danhof.
Danhof recently penned a commentary for Investor’s Business Daily about his legal back-and-forth with Apple, which is available here.
The Federalist also wrote an article on the topic, which is available here.
Launched in 2007, the National Center’s Free Enterprise Project focuses on shareholder activism and the confluence of big government and big business. Over the past four years alone, FEP representatives have participated in over 100 shareholder meetings – advancing free-market ideals about health care, energy, taxes, subsidies, regulations, religious freedom, food policies, media bias, gun rights, workers’ rights and other important public policy issues. As the leading voice for conservative-minded investors, it annually files more than 90 percent of all right-of-center shareholder resolutions. Dozens of liberal organizations, however, annually file more than 95 percent of all policy-oriented shareholder resolutions and continue to exert undue influence over corporate America.
FEP activity has been covered by media outlets including the New York Times, Washington Post, USA Today, Variety, the Associated Press, Bloomberg, Drudge Report, Business Insider, National Public Radio and SiriusXM. FEP’s work was prominently featured in Wall Street Journal writer Kimberley Strassel’s 2016 book The Intimidation Game: How the Left is Silencing Free Speech (Hachette Book Group).
The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 60,000 active recent contributors. Sign up for email updates here. Follow us on Twitter at @NationalCenter for general announcements. To be alerted to upcoming media appearances by National Center staff, follow our media appearances Twitter account at @NCPPRMedia.