MICROSOFT CORPORATION | Eliminating Discrimination through Inclusive Hiring

Status
Filed
AGM date
Proposal number
2
Resolution details
Company ticker
MSFT
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Diversity & human capital management
  • Labour standards / Forced labour / Non-discrimination
Company sector
Technology
Company HQ country
United States
Resolved clause
Shareholders request that the Board of Directors prepare a report analyzing whether Microsoft hiring practices related to people with arrest or incarceration records are aligned with publicly stated DEI (diversity, equity, and inclusion), racial equity, or criminal justice reform goals, and other public statements such as the Fair Chance Business Pledge. The report, prepared at reasonable cost and omitting proprietary information and published publicly within one year, is recommended to evaluate the risk of discrimination, including racial discrimination, that may result from failure to implement targeted fair chance employment practices.
Whereas clause
In recent decades, the U.S. incarceration rate has skyrocketed, and Black and Brown people are still incarcerated more often and for harsher sentences than white people.1 People with arrest or incarceration face enduring stigma that negatively impacts employment opportunities;

However, employing formerly incarcerated people can benefit companies. The tight tech labor market means that employers must “not only rewrite the hiring and retention playbook but also cast a wider net by diversifying the technology talent pool.”2 Concurrently, companies, including Microsoft, seek to implement racial equity commitments;

Given the disproportionately high incarceration rates of Black and Brown people in the U.S. and case study evidence that formerly incarcerated employees can have lower turnover and better attendance and disciplinary records compared to their peers without criminal records, recruiting fair chance employees can help ease labor market constraints and advance racial equity goals;

Fair chance employers recruit from the talent pool of people with arrest and incarceration records. Best practices include:

• Resolving technical barriers in applications, such as algorithms that eliminate applicants with employment gaps;

• Creating internship and training programs with direct hire potential for people with arrest and incarceration records;

• Hosting job fairs targeting fair chance jobseekers;

• Removing blanket exclusions on specific crimes beyond legal requirements;

• Ensuring that reviewers are trained in properly reading criminal records and using best practice standards for individualized reviews;

• Partnering with advocacy organizations that specialize in job preparation, entrepreneurship, in-prison education, and/or career pathways for incarcerated people;

• Routinely examining anonymized data on fair chance hires to ensure racial and gender equity;

• Destigmatizing the issue of criminal records throughout the entire workforce;

Fair chance employers are not blind to criminal records – hiring managers still perform background checks and consider suitability – but employers commit to fairer hiring practices that consider the potential of stigma and bias;

Despite signing the Fair Chance Business Pledge in 2015 and joining the Second Chance Business Coalition, Microsoft has not implemented comprehensive fair chance employment practices. For example, while it has eliminated questions about criminal convictions from job applications, this is only a first step that is already required of federal contractors and mandated by law in locations that cover 80% of the U.S. population3;

Discriminatory practices expose our company to legal liability, while excluding qualified individuals because of criminal records could harm Microsoft’s competitive advantage.