Investor Pushes Alphabet for Whistleblowing Review
April 13 2021 - 5:59AM
Dow Jones News
By Mengqi Sun
An investment group is again pushing Google's parent Alphabet
Inc. to assess the effectiveness of its internal whistleblowing
program, saying recent incidents suggest the company may have
potential internal cultural or ethics problems.
For the second year in a row, Trillium Asset Management LLC
submitted a shareholder proposal to Alphabet asking the tech
giant's board to oversee a third-party review of the effectiveness
of the company's whistleblower policies in protecting human
rights.
"Investors for the most part are familiar with whistleblowing
systems and protections and really prize whistleblower protections
because, at the end of the day, they do protect long-term investors
like Trillium," said Jonas Kron, the firm's chief advocacy
officer.
The Boston-based firm's proposal, which was submitted in
December and could be voted on during Alphabet's shareholder
meeting this year, cited several examples of alleged retaliation
against workers, saying the incidents were red flags about
potential internal problems related to culture, ethics and human
rights. Trillium's proposal calls for the company to make the
report public.
A spokeswoman for Alphabet declined to comment. The company has
yet to set a date for its annual meeting.
As of Dec. 31, Trillium held about 63,078 shares of Alphabet, a
position worth about $141.6 million based on Monday's closing
price, and accounted for about 0.02% of Class A shares, according
to FactSet.
In the latest proposal, Trillium cited a 2020 report from the
National Labor Relations Board that alleged Google surveilled and
interrogated employees about protected activities and may have
retaliated against them. The proposal also made reference to Timnit
Gebru, an artificial-intelligence researcher who said she was fired
by Google after she refused to retract a research paper and
complained about the company in an email to colleagues.
Google Head of AI Jeff Dean told staff in an email at the time
that an internal team determined that Ms. Gebru's most recent AI
research was insufficiently rigorous and that she encouraged
colleagues not to participate in Google's diversity, equity and
inclusion programs, and that he was disappointed about that, The
Wall Street Journal previously reported.
The new proposal also follows a 2020 report by Principles for
Responsible Investment, a network of investors, that said
whistleblowing mechanisms are a key feature of good governance and
reflective of a healthy corporate culture.
"Alphabet may face business risks related to employee morale and
user trust due to insufficient protection for employees voicing
ethical and human rights concerns," Trillium said in the
proposal.
Whether or not the proposal is opted, it is already a powerful
message to Alphabet, according to Nell Minow, vice chair of
ValueEdge Advisors, which advises institutional investors on
corporate governance issues. "It's a pebble in the shoe for the
board of directors," she said.
Whistleblowing hasn't been a priority for investors focused on
environmental, social and corporate governance issues, but it falls
on the list, Ms. Minow said. "ESG is all about risk management,"
she said, "and whistleblowing is right in the middle of that."
Trillium submitted a similar shareholder proposal for the 2020
Alphabet shareholder meeting, which received about 5% of
shareholder votes at the meeting in June. Trillium doesn't expect
the proposal to get a majority vote this year, but it expects to
receive more support than last year -- especially if the proposal
gets support from proxy advisory firms.
Alphabet's board of directors recommended a vote against the
2020 proposal, saying it already had policies that prohibit
retaliation for raising concerns related to violations of its code
of conduct, policies or laws, including its human rights
commitments, or for participating in a related investigation.
"I don't think there will be these many red-flag events if the
system is working well," Mr. Kron said.
Write to Mengqi Sun at mengqi.sun@wsj.com
(END) Dow Jones Newswires
April 13, 2021 05:44 ET (09:44 GMT)
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