Apple Facing Criticism About Diversity Changes Bylaws

Apple Inc. (AAPL), facing behind-the-scenes pressure from some shareholders to add more female directors and executives, has taken a step to address the criticism and diversify its board.

The world’s most valuable company recently added language to a board committee charter vowing to diversify its board. The move follows objections from shareholders Trillium Asset Management LLC and the Sustainability Group, who said they’re disappointed that the iPhone maker has only one woman on its eight-member board, and one incoming female member of the executive team that reports to Chief Executive Officer Tim Cook.

The shareholders met with Apple representatives several times in the past few months and said they would bring the issue to a vote at a Feb. 28 shareholder meeting. They said they backed off after Apple added language to the charter that promises to consider women and minorities as board candidates, without making any specific commitments.

“There is a general problem with diversity at the highest echelon of Apple,” said Jonas Kron, director of shareholder advocacy at Boston-based Trillium, which manages $1.3 billion. “It’s all white men.”

The new language shows how scrutiny of Apple’s diversity practices has now ramped up after other Silicon Valley companies faced questions over their male-dominated leadership ranks. Social-networking companies Facebook Inc. and Twitter Inc. (TWTR) were criticized leading up to their initial public offerings for not having any female directors.

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Apple is now adding the following language to the charter: “The nominating committee is committed to actively seeking out highly qualified women and individuals from minority groups to include in the pool from which board nominees are chosen.”

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Trillium and the Sustainability Group are groups that use their positions as shareholders to lobby companies for improved environmental protection, corporate governance and diversity within leadership ranks. Trillium successfully lobbied Apple in 2012 to add new language to the board’s audit and finance committee charter about privacy and the handling of customer data.

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Andrea Jung, the former CEO of Avon Products Inc., is the lone woman and person of color on Apple’s board, which otherwise includes seven white men all over the age of 50. Angela Ahrendts, the former CEO of Burberry Group Plc, will be the only woman on the company’s executive team when she takes over Apple’s retail operation in the first half of this year.

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Cook has also been outspoken about improving equality since succeeding Steve Jobs as CEO in 2011. Cook and Apple have advocated legalizing same-sex marriages in the U.S., and for legislation that prohibits companies from discriminating based on sexual orientation. Cook recently gave a speech about his childhood in Alabama and how witnessing a cross-burning left a lasting impression on him to fight for equality.

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