Amazon said on Monday that it would adopt a policy whereby women and people of color are included in the pool of candidates for all board openings, essentially agreeing to a hotly debated shareholder proposal it had initially opposed.
Amazon will adopt a ‘Rooney Rule’ to increase board diversity after its initial opposition sparked employee outrage
The company says it is merely formalizing a practice that was already in place.
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
“The Amazon Board of Directors has adopted a policy that the Nominating and Corporate Governance Committee include a slate of diverse candidates, including women and minorities, for all director openings,” the company said in an SEC filing on Monday. “This policy formalizes a practice already in place.”
Recode reported last week that the Amazon board’s initial opposition to such a policy had stirred up anger among some employees. Amazon’s 10 board members are all white; three of the 10 are women.
Company headshots, Joi Ito (cc) via Flickr, Getty images, LinkedIn
It is not clear why the company initially opposed formalizing the practice if it was one that was “already in place,” but in a letter to the Congressional Black Caucus, Amazon’s VP of public policy Brian Huseman wrote:
“We reached this decision after listening to your feedback as well as that from Amazon employees, shareholders, and other stakeholders about the Board diversity proposal. These conversations led us to reconsider both our decision on the shareholder proposal and how we explained our initial recommendation.”
The Hill reported last week that several members of the CBC planned to send a letter to Amazon on Monday saying that its opposition to the proposal was “astounding.”
“Our astonishment is compounded when you consider the fact that your ‘customer-centric’ company — with over 300 million active users — has zero people of color on your 10-person Board of Directors,” the lawmakers wrote.
The Rooney Rule was first adopted In the National Football League, where it requires all teams to interview at least one person of color each time a head coaching or general manager role comes open.
The initial shareholder proposal, jointly submitted by the Master Trust of the Service Employees International Union and CtW Investment Group, said that “Shareholders have long believed that embracing diversity will benefit companies by providing greater access to talent, harnessing existing talent more effectively, and improving decision making by reducing groupthink and similar psychological biases.”
The proposal noted that Amazon was the only company among a group of 18 it had identified as peers that did not have a person of color on its board of directors. Outside of the board, Amazon’s executive ranks are also occupied predominately by white men. Of the company’s top 18 executives, 17 are men and all are white.
In its initial opposition to the shareholder proposal, Amazon had said that it already seeks out candidates with diversity in mind, but that the “Board believes that adoption of the policy requested by the proposal would not be an effective and prudent use of the Company’s time and resources.”
“Our processes for nominating directors involve complex considerations that are designed to advance the long-term interests of shareholders,” the company added in the initial proxy statement.
Inside Amazon, employees peppered the company’s communications department with questions about the current board selection process and how it could be deemed successful if all 10 directors were white, emails viewed by Recode showed. One Amazon employee ended a long email to coworkers and management with this plea:
We have a chance to be the FIRST to tackle this amongst top tech companies, but whenever diversity issues come up, we run from data and sprint towards overelaboration and buzzwords. No one in a position of real authority here at Amazon is willing to be misunderstood for long periods of time on diversity. Matter fact, we choose to misunderstand rather than be misunderstood.
I know there are many people internally working really hard on these issues (both FT D&I staff and all the unpaid diversity laborers in our affinity group leadership teams!) who I know are reading stuff like this and feeling like their efforts are being detracted. You are who I am saying this for:
We don’t need more effort, we need COURAGE.
This article originally appeared on Recode.net.
