At this month's AGM Alphabet employees said lack of diversity at the tech giant leaves them feeling unsafe while ESG investors called for executive pay linked to progress on inclusion metrics. Diana Rojas reports on an issue that is not going to go away for the entire tech sector
Google is widely praised for its leadership in championing sustainable energy, but the internet giant has had brickbats rather than bouquets lobbed at it in the past year in another area of responsible business: addressing gender and diversity issues among its employees.
In January, Google fired engineer James Damore, months after he circulated a memo accusing the company of discriminating against white, male and conservative employees. Then it was sued by another engineer, who said he was wrongfully terminated after his response to Damore’s memo criticized Google’s diversity efforts. Other pending lawsuits allege harassment and hiring bias, while the Department of Labor is looking into complaints that the company has been under-paying women.
This month, at its annual general meeting in Mountain View, California, Google’s parent company Alphabet rejected a proposal asking for executive compensation to be tied to diversity and inclusion metrics, saying that the company was already committed to incorporating and promoting those values in its business.
The lack of clear, communicated policies and actions to advance diversity and inclusion has left many of us feeling unsafe
Software engineer Irene Knapp, who introduced the proposal, which was backed by other employees, investors and socially responsible investment firm Zevin Asset Management, told the meeting: “The lack of clear, communicated policies and actions to advance diversity and inclusion with concrete accountability and leadership from senior executives has left many of us feeling unsafe and unable to do our work."
In their proposal, the filers noted that the company has only one person of colour and four women among its top 31 executives. Google's internal data shows only a one percentage increase in female employees (from 30% to 31%) and in under-represented minorities (from 9% to 10%) in the past four years.
“It is our belief as investors, as engineers and as tech professionals that a lack of executive leadership around sustainability, diversity and inclusion fundamentally hurts the quality of products Alphabet can deliver to users,” Knapp added.
The proposal had been expected to be voted down, as Alphabet’s two co-founders hold outsized control in the dual-voting structure. Shareholders also voted down another proposal, brought by Arjuna Capital, requesting that Alphabet report on “the risks to the company associated with emerging public policies on the gender pay gap”. Google called a proposal redundant as it has published an analysis on pay equity earlier this year.
The US tech sector is one of the poorest performers in diversity and inclusion metrics, and Google is by no means the worst when it comes to gender parity. With females making up 31% of its workforce, it lags behind leaders Pandora and Groupon (48% and 47%, respectively) but ahead of Microsoft and Intel (26% and 25%), according to 2016 numbers by data visualization company Information is Beautiful, which put female representation in America’s top 50 companies at 54%.
But it fares far worse with regards to diversity. Although blacks and Latinos each make up about 12% of the US population, they account for only 2% and 3%, respectively, of Google’s employees. Amazon leads, with 21% of employees who are black and 13% Latino, while Dell’s numbers are 10% and 11%, according to Information is Beautiful.
Alphabet understands itself to be at a transition point
Pat Miguel Tomaino, director of socially responsible investing at Zevin, said the firm reached out to several large tech companies last summer to flag up their lack of progress in diversity and inclusion, including, Alphabet and Citrix Systems.
He said Citrix had responded positively to its proposal to tie diversity and inclusion efforts into executive pay, while Zevin had a “pretty constructive meeting” with senior executives at Alphabet last fall. “Alphabet understands itself to be at a transition point,” he believes, and is looking toward more top-driven initiatives. He noted that Google’s new chief diversity and inclusion officer, Danielle Mastrangel Brown, hired last June, came from Intel, which ties executive compensation to diversity and inclusion goals.
Tomaino said the firm is planning a follow-up meeting with Alphabet and looking towards other like-minded investment firms to keep pressing the company for change.
This article is part of the in-depth briefing, Gender and Diversity. See also:
Lise Kingo: ‘We have to spark a gender equality revolution’
The US firms opening their doors to greater diversity
Why supply chains are key to empowering women and increasing GDP
Coca-Cola’s 5by20 recipe to empower 5 million women
Vodaphone makes progress in push to close the mobile gender gap
How Equileap is helping investment in girls to grow up
google Alphabet diversity and inclusion US tech sector