Shareholders are pushing Google to diversify its executive committee

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Image: Reuters/Mario Anzuoni
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Shareholders of Alphabet, the parent company of Google, are pushing the company to diversify its three-person executive committee by including women or minorities.

The committee is currently made up of Google’s founders, Larry Page and Sergey Brin, and its chairman and former CEO, Eric Schmidt. It has had the same membership since Alphabet was created in 2015, but Schmidt is retiring this month, and Trillium Asset Management—a fund manager specializing in responsible investing—figures the time is ripe for Alphabet to diversify its top leadership.

Trillium is calling attention to a shareholder proposal it introduced last year “to request the Board of Directors take steps to make the Board’s Executive Committee diverse in terms of race, ethnicity, and gender.” The proposal will be included in the Alphabet’s proxy statement in April and voted on during the company’s annual meeting, usually held in June, but Trillium is hoping Alphabet makes it moot by then, said Jonas Kron, the firm’s director of shareholder advocacy.

Ideally, Alphabet would replace Schmidt with a woman or member of a minority group before the summer, and Trillium could withdraw its proposal, Kron said. Alphabet hasn’t said whether it intends to maintain its three-person executive committee, and the company didn’t respond to Quartz’s request for comment.

Trillium initially submitted its proposal in September, in the aftermath of the controversy surrounding a memo from Google engineer James Damore who decried the company’s diversity initiatives. While Google is trying to make improvements to its culture and composition, thus far its efforts have fallen short, Kron said, and it may be time for a new strategy.

“We know that there’s strong evidence that boards that are more diverse are correlated with companies that are more successful,” he said. “It stands to reason that what is good for the board as a whole is also good for the executive committee. Here is also an opportunity for a symbolic move, to show that its top, top leadership is not all white men.”

Alphabet’s 12-person board does include women and people of color, including Google’s CEO, Sundar Pichai, a native of India. Promoting Pichai to the executive committee might be the most likely scenario for diversifying the committee.

If the proposal does come to a vote later this year, the odds against its passage are steep, given that Page and Brin control 51% of Alphabet’s voting shares. Even if they agree with the merits, it seems unlikely they would cast votes endorsing the idea Google isn’t doing enough.

While Kron—at least officially—hasn’t abandoned the idea that Page and Brin would support the proposal, he says its larger purpose is to generate discussion among shareholders. The hope is Alphabet’s big institutional investor shareholders, like Vanguard and BlackRock, will vote for it and send a message to the company’s board, he says. “If this proposal broke out of the single digits, that would be a really strong signal.”