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Amazon Board Opposes Shareholder Proxy On Diversity - What's Next?

For the HR leaders who follow this blog, the news that Amazon has formally opposed a shareholder proxy related to diversity bears watching.  In a nutshell, CtW Investment Group — asked Amazon to “implement a ‘Rooney Rule’ requiring that the initial list of candidates from which new management-supported director nominees are chosen should include (but need not be limited to) qualified women and minority candidates.”

The Rooney Rule requires NFL teams (professional football) to interview at least one minority candidate for head coaching and general manager openings. Currently, all 10 directors of Amazon’s board are white. Seven are men and three are women. Amazon

In advance of the shareholder vote deadline of May 25, Amazon’s board recommended a vote against the proposal — setting off an internal debate.

I've written about the Rooney rule and what it could mean for your company before.  

For Amazon, it's clear that allowing a shareholder to put forward a provision that requires the board to do anything is unacceptable to the company - it's all about control for the board.  They can want the same things that the investor group wants related to diversity - but they'll be damned if they're going to lose control of any part of the process.  To the uninitiated, boards recommend "no" votes on anything that causes them to lose control.  ANYTHING.  So this is no surprise, but it looks awful in a headline and to many employees as well.

But as I've written before, the Rooney rule has some clear benefits, most notably that diverse candidates who never would have made it in the process (for a variety of reasons) get the chance to interview and do well.  Sometimes that results in a hire, a lot of times it doesn't, but the hiring executives and managers get opened up in the process.  Whether a hire happens or not, people see candidates they would not have seen otherwise and surprise!  They learn the candidate in question is pretty damn good.  They start to wonder if they're ready for the job.  The candidate gets the chance to become part of the conversation.

Over time, progress happens.  Hires start to roll in at some point.  The progress can be uneven, but it is there.

Amazon's going to pay the price in the court of public/employee opinion for their recommendation to vote against this proposal.  The smart play here is to take action with Rooney Rule-type guidance at the next layer down in the company - think all VPs and Directors - to show they are pro-diversity beyond other companies - even if the Board won't cede control.

Good luck Amazon.  You probably need to make a move here to show your employee base you mean business when it comes to diversity hiring.

See my past post on what the Rooney Rule could do for your company by clicking here.

 

Comments

MattL

Well, at least Amazon didn't attack a nun.

https://www.cypress.com/documentation/ceo-articles/cypress-ceo-responds-nuns-urging-politically-correct-board-make

BOM (aka, The Business of Management

My experience is that company Boards rarely back shareholder proposals and sort of grudgingly put them up for a public vote. That's why I ALWAYS vote for them, because company Boards are frequently all about control and not so much about what is best for the company.

The Rooney Rule isn't perfect in the NFL, but it's a great step in the right direction and it HAS increased diversity of NFL head coaches and general managers. It would do the same for Amazon, I'm sure. At a minimum, it shows that you are trying to get beyond the happy talk of embracing diversity and actually do something about improving it.

What surprises me here is that Jeff Bezos, who usually seems to embrace stuff like this, hasn't taken a leadership role on this topic. This new diversity rule at Amazon WILL happen, no matter what the Board says, if Mr Bezos decides to get behind it. Maybe somebody should start a letter writing campaign to The Washington Post to tell him it's the right thing to do.

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