THE COCA-COLA COMPANY | Workplace Culture: Concealment Clauses at THE COCA-COLA COMPANY

Status
Filed
AGM date
Previous AGM date
Resolution details
Company ticker
KO
Lead filer
Nathan Cummings Foundation
Resolution ask
Other ask
ESG theme
  • Social
ESG sub-theme
  • Decent work
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Staples
Company HQ country
United States
Resolved clause
RESOLVED Shareholders request the Board of Directors oversee the preparation of an annual public report describing and quantifying the effectiveness and outcomes of Coca-Cola Consolidated's efforts to prevent harassment and discrimination against its protected classes of employees. At its discretion, the Board may wish to consider including disclosures such as the:
total number and aggregate dollar amount of disputes settled by the company related to abuse, harassment, or discrimination in the previous three years;total number of pending harassment or discrimination complaints the company is seeking to resolve through internal processes, arbitration, or litigation;retention rates of employees who raise harassment or discrimination concerns, relative to total workforce retention; aggregate dollar amount associated with the enforcement of arbitration clauses;number of enforceable contracts for current or past employees which include concealment clauses, such as non-disclosure agreements or arbitration requirements, that restrict discussions of harassment or discrimination; andaggregate dollar amount associated with such agreements containing concealment clauses.This report should not include the names of accusers or details of their settlements without their consent and should be prepared at a reasonable cost and omit any information that is proprietary, privileged, or violative of contractual obligations.
Supporting statement
SUPPORTING STATEMENTNumerous studies have pointed to the benefits of a diverse workforce. Their findings include:
BlackRock found that companies with more gender-balanced workforces meaningfully outperformed their peers between 2013 and 2022.[1]Companies with the strongest executive ethnic diversity were 33 percent more likely to have financial returns above their industry medians than those in the bottom quartile for executive ethnic diversity. [2]A review of the workforce diversity of over 1,500 companies found a positive relationship between manager diversity and several financial performance indicators, including return on equity and return on invested capital.[3]Findings from The Wall Street Journal, Harvard Business Review, Credit Suisse, and others have also pointed to the benefits of a diverse workforce.[4]
Coca-Cola Consolidated has approximately 17,000 employees[5], but limited public reporting that would allow investors to assess the health of its workplace culture.
It is unknown to what extent Coca-Cola Consolidated uses non-disclosure agreements and mandatory arbitration, which conceal from external audiences internal culture challenges. Given this, the extent to which harassment and discrimination exist within the company is unknown.
There have been several high-profile derivative suits settled, including at Twentieth Century Fox, Wynn Resorts, and Alphabet, alleging boards breached their duties by failing to protect employees from discrimination and harassment, injuring the companies and their shareholders.
Civil rights violations within the workplace can result in substantial costs to companies, including fines and penalties, legal costs, costs related to absenteeism, reduced productivity, challenges recruiting, and distraction of leadership. A company’s failure to properly manage its workforce can have significant ramifications, jeopardizing relationships with customers and other partners.
A public report such as the one requested would assist shareholders in assessing whether the Company is improving its workforce management.
[1] https://www.ft.com/content/f8b902b9-ca9a-42db-a3cd-97fe2cc13863
[2] https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/delivering-through-diversity
[3] https://www.asyousow.org/reports/2023-capturing-the-diversity-benefit
[4] https://www.asyousow.org/report-pages/workplace-diversity-and-financial-performance
[5] https://stockanalysis.com/stocks/coke/employees/

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