Historically, shareholders have been the driving force in holding companies accountable for their actions and conduct. Over the last three years, shareholder derivative actions were filed seeking redress from companies ranging from Facebook and Qualcomm to Wynn Resorts and most recently, Pinterest.
Employees, however, are now in the vanguard as activists. Nearly 4 in 10 (38 percent) of U.S. employees report they have spoken up to support or criticize employer’s actions over a controversial issue. Millennials are particularly vocal and not surprisingly, are a primary catalyst behind this trend.
Unlike shareholder activism, which is industry agnostic, employee activism is concentrated primarily, though not exclusively, in the technology sector. Employees have urged Amazon to cut its carbon emissions and reduce the use of fossil fuels, protested against Microsoft doing business with Immigration and Customs Enforcement (ICE) and staged a global walkout against Google in the wake of a $90 million severance package to a former senior executive accused of sexual misconduct.
Google found itself in the spotlight, yet again, earlier this month over the recent departure of Dr. Timnit Gebru, a co-leader of its Ethical Artificial Intelligence team. The controversy arose over a research paper that Gebru co-authored for an industry conference that, according to Google, failed to meet its review protocols. A subsequent email was sent by Gebru expressing her frustration with Google’s resistance regarding submission of the paper as well as its diversity efforts generally. Deemed by Google as “inconsistent with the expectations of a Google manager,” the email states, in part, “What I want to say is to stop writing your documents because it doesn’t make a difference…there is zero accountability. There is no way more documents or more conversations will achieve anything. Have you ever heard of someone getting “feedback” on a paper through a privileged and confidential document to HR? Does that sound like a standard procedure to you or does it just happen to people like me who are consistently dehumanized?”
Reaction to Gebru’s departure was swift, particularly since she was one of Google’s few Black employees, which comprise 3.7% of its total workforce. In support of Dr. Gebru, Google Walkout for Real Change, an internal advocacy group, posted a petition, “Standing with Dr. Timnit Gebru – #ISupportTimnit #BelieveBlackWomen,” demanding clarity with respect to Google’s decision regarding the research paper, greater transparency, and a commitment to research integrity and academic freedom. Signed by 2351 “Googlers” as well as 3729 academic, industry and other supporters, it is further evidence of the momentum of employee activism.
Google’s CEO subsequently addressed the issue, without apologizing to Gebru, and pledged to undertake an internal investigation. This however, like so many matters due to poor mishandling, did not have to escalate to this point. The trigger for employee activism generally tends to be a negative event or conduct and though organizations will never be able to eliminate activism, they can nevertheless create an environment that minimizes the fallout. These are some proactive steps to take:
Pay Attention to culture. Conduct an annual cultural audit to take the internal pulse of the organization. Culture is an area that gets short shrift. According to Deloitte’s Board Practices Report, 12% of Board respondents indicate that as a topic, culture, is never on the Board’s agenda. Worse and equally disconcerting, another 12% of respondents indicated that they either don’t know if culture is on the Board agenda or it’s not applicable. This is a staggering and a tactical error as you can’t address a problem if you don’t know you have a problem. This, of course, is distinct from willfully ignoring a known problem in the misguided hope that it will either disappear or not resonate with employees.
Recognize the criticality of middle management and nurture it. Middle management is grossly underrated. It is preferable for a concerned employee to discuss their issues with an empowered mid-level manager who can escalate the matter accordingly, if necessary. This is often a far more palatable option for employees than consulting the Human Resources Department, too many of which have gained the reputation of being part of the problem rather than the solution.
Hold senior management accountable. The role of the Board of Directors, as fiduciary stewards, is oversight. For a variety of reasons, however, boards struggle with dissent and as a result board members have an aversion to expressing a contrarian point of view. According to PwC’s Annual Corporate Directors Survey, more than one-third of board directors indicated that it’s difficult to voice a dissenting opinion in the boardroom. This, however, is not an optimal model of governance, and has been shown to enable misconduct, and derivatively, corporate exposure.
Employee activism is now yet another mechanism to hold management accountable for its actions. It is here to stay and in today’s climate will continue to accelerate.