Apple CEO Tim Cook has indicated that the company might need to adjust its diversity practices in response to evolving legal conditions in the United States.
His comments emerged minutes after most shareholders dismissed a proposal urging the tech giant to reevaluate its diversity policies, which include considering race and sex in hiring practices.
Apple strongly advised its shareholders to reject the proposal, asserting it was “inappropriately” attempting to “micromanage” the company’s operations.
The firm faces increased scrutiny following US President Donald Trump‘s call to eliminate diversity, equity, and inclusion (DEI) programs across government and private sectors.
Legal challenges have emerged against Trump’s directives. Yet, numerous US companies, including prominent entities like Meta, Amazon, and Goldman Sachs, have proactively terminated or modified their policies, pointing to potential legal liabilities
Apple’s choice to oppose the shareholder proposal has defied prevailing trends.
The anticipated outcome of Tuesday’s vote reflected a broader trend, as shareholder measures that face opposition from companies typically struggle to gain traction.
The recent outcome represents the second notable setback for a shareholder proposal focused on diversity, equity, and inclusion, following a comparable dismissal at the retail giant Costco.
Despite the recent vote, Mr. Cook acknowledged on Tuesday that the company might need to change certain practices.
During a question-and-answer session at the company’s annual shareholder meeting, Mr Cook stated, “As the legal landscape around this issue evolves, we may need to make some changes to comply, but our north star of dignity and respect for everyone and our work to that end will never waver.”
He emphasised that Apple refrains from implementing “quotas” in its hiring practices, a method that has faced significant backlash. He asserted that the company’s strength lies in its culture, which fosters collaboration among individuals with diverse backgrounds and perspectives.
“We will persist in our collaborative efforts to foster a culture of belonging that enables everyone to perform at their highest potential,” he stated, emphasising the company’s dedication to the principles that have consistently defined its identity.
A proposal aimed at Apple’s diversity, equity, and inclusion policies has received support from the National Centre for Public Policy Research. This conservative think tank previously introduced a similar initiative at Costco.
The report contended that Apple’s diversity and inclusion initiatives have placed the company at risk of “litigation, reputational and financial challenges.” It highlighted a broader trend of corporate withdrawal and observed that recent legal actions have simplified the process for employees to file discrimination lawsuits.
Stefan Padfield, representing the Free Enterprise Project, addressed the assembly on Tuesday, highlighting that the risks facing Apple have escalated following the recent directive from the Trump administration for staff to examine diversity, equity, and inclusion initiatives within the private sector.
“The shift in atmosphere is unmistakable,” he stated. “The focus has shifted from diversity, equity, and inclusion to a renewed emphasis on merit.”
Apple’s move to resist the shareholder proposal, while also indicating a willingness to reconsider its policy, is expected to appease both factions in the ongoing debate, according to Angela Jackson, a senior advisor to the Project on Workforce at Harvard University and author of the upcoming book, The Win-Win Workplace.
However, she cautioned that this situation has positioned Apple in a defensive stance. She expressed her desire to lead the company by developing a more substantial business case for the programs.
They have taken the appropriate actions. One potential avenue for advancement lies in explicitly stating, ‘Indeed, these are our values; we believe this is the right course of action, but it also represents an economic necessity.’
The ongoing debate surrounding DEI in the United States has sparked enquiries into whether similar policies in other nations will encounter comparable obstacles.
Catherine Howarth, the chief executive of the responsible investment charity ShareAction, expressed her belief that Apple, a prominent consumer-facing company, has calculated that the advantages of opposing the shareholder proposal surpass the potential risks.
“Abandoning what were purportedly your principles in this area until very recently is proving unpopular among consumers and employees,” she stated.
“There is a prevailing belief that the outcome would be detrimental, and indeed it would, particularly among their worldwide consumer audience.”
In a recent vote, shareholders turned down proposals to mandate Apple disclose information regarding its AI privacy practices, charitable contributions, and strategies to address child sex abuse.
The board members and and the company’s executive compensation plan received backing, notably including a pay package for Mr. Cook exceeding $74 million.
