AMAZON.COM, INC. | Hourly Associate on Board of Directors

Status
18.45% votes in favour
AGM date
Previous AGM date
Proposal number
20
Resolution details
Company ticker
AMZN
Lead filer
Oxfam America
Co-filers
Society of Mary (Marianists)
Resolution ask
Amend board structure
ESG theme
  • Governance
ESG sub-theme
  • Decent work
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
Shareholders of Amazon.com, Inc. (“Amazon”) urge the board to adopt a policy of promoting significant representation of employee perspectives among corporate decision makers by requiring that the initial list of candidates from which new board nominees are chosen (the “Initial List”) by the Nominating and Governance Committee include (but need not be limited to) hourly employees. The policy should provide that any third-party consultant asked to furnish an Initial List will be requested to include such candidates.
Whereas clause
Amazon has been publicly excoriated for mistreating workers, including criticism over dehumanizing and dangerous working conditions, and anti-union activities. Employees have described workplace conditions as “hellish.”1 The NY Times observed that during the pandemic, “Amazon’s system burned through workers, resulted in inadvertent firings and stalled benefits... casting a shadow over a business success story.”2 A leaked internal memo warned that Amazon churns through workers so quickly that it will exhaust the U.S. labor pool by 2024.3 As public opinion shifts in favor of unionization,4 Amazon’s anti-union activities – including persistent litigation against a successful union vote5 – poses growing reputational risk and hurts the company’s ability to recruit and retain employees, threatening shareholder value.
Amazon’s grueling working conditions also generate risks: As of July 2022, the Department of Labor and federal prosecutors were inspecting Amazon warehouses in NYC, Orlando, and Chicago as part of an investigation into high injury rates.6 The company also evinced lack of concern with worker safety and voice when it suspended 50 employees for pausing work following a fire in the Staten Island facility.7
Amazon’s board lacks representation from hourly employees – and suffers from low representation of women and racial minorities,8 which constitute a large percentage of Amazon’s hourly associates – who understand the company’s operations and can flag critical labor issues.
Amazon must urgently address these issues. Worker representation on the Board will help it do that, empowering Amazon to address employee concerns before they become headlines. In addition to mitigating legal, operational and reputational risks, employee representation promotes value creation. In Germany, the “co-determination” model of shared governance reduces short-termist capital allocation practices,9 and employee representation on boards generated a 25% spike in productivity.10
There is growing recognition that employees on boards contribute to a company’s long-term sustainability. The UK recently mandated that boards engage with employees to enhance worker voice in the boardroom, which may include appointing non-executive employees as directors.11 Investors have also increasingly expressed support for workers on boards, filing proposals on this topic at companies including Walmart, Disney, Citigroup, and Starbucks. Even the business community has drawn similar conclusions: the Business Roundtable, to which Amazon’s CEO belongs, observes that investing in employees and communities offers “the most promising way to build long-term value.”12
1 https://nypost.com/2019/07/13/inside-the-hellish-workday-of-an-amazon-warehouse-employee/
2 https://www.nytimes.com/interactive/2021/06/15/us/amazon-workers.html
3 https://www.theverge.com/2022/10/17/23409920/amazon-third-hires-attrition-cost-workforce; https://www.vox.com/recode/23170900/leaked-amazon-memo-warehouses-hiring-shortage.
4 http://news.gallup.com/poll/335545/approval-labor-unions-highest-point-1965.aspx
5 http://www.cnbc.com/2022/09/01/amazon-loses-union-effort-to-overturn-win-at-staten-island-facility.html
6 https://www.cnbc.com/2022/07/18/amazon-faces-probe-by-federal-prosecutors-osha-into-warehouse-safety.html
7 https://www.washingtonpost.com/business/2022/10/04/amazon-work-stoppage-new-york-suspension-union/.
8 http://www.usatoday.com/story/money/2022/06/22/amazon-black-executives-diversity- struggles/7702689001/?gnt-cfr=1
9 https://prospect.org/labor/codetermination-difference/
10 https://www.govenda.com/blog/employee-representation-on-boards/
11 https://www.pinsentmasons.com/out-law/analysis/corporate-governance-employee-voice-workplace-reporting
12 https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
EFG Asset Management For A vote FOR this proposal is warranted, as the company faces significant controversies related to treatment of its
employees.
Anima Sgr For As the company continues to face significant controversies related to the treatment of its employees and the proposal would give the board more options for nominating director candidates that it considers could help it in considering worker grievances, potentially reducing risks of reputational damage and protecting shareholder value in the long-term, but without being overly prescriptive. It is not asking for an employee representative on the board, but a policy to include hourly workers among the list of candidates the Nominating and Governance Committee considers for open board positions.
Rothschild & co Asset Management For
Kutxabank Gestion SGIIC SAU. Against

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