Shareholders of Activision Blizzard, Inc. (Activision or the Company) urge the Board of Directors (the Board) to adopt a policy of nominating a director candidate who is selected by the Company’s non-management employees (the Employee Representative Director Nominee). The Employee Representative Director Nominee shall be selected by non- management employees using an election process. Compliance with this policy shall be excused if the Employee Representative Director Nominee does not consent to serve on the Board or would cause the Company to violate any law, regulation, or stock exchange listing requirement.
Employee representation on boards of directors can contribute to long-term corporate performance in several ways. A non-management employee representative can result in better board decision-making by facilitating information sharing between the board and employees. Employees may be more productive and better motivated if they have a voice in the governance of the corporation. They may also be more willing to invest time and energy to develop firm- specific knowledge and experience that contributes to a high productivity workplace. Employee board representation is common in Europe where over a dozen countries require some form of codetermination for private-sector companies. A recent academic study of co- determination in Germany did not find any negative profitability effects or detrimental changes in wages or investment levels resulting from employee representation on boards.1 The Organisation for Economic Co-operation and Development (OECD) has also urged that [m]echanisms for employee participation should be permitted to develop.2 We believe that including an employee representative on Activision’s Board will be particularly beneficial in light of recent allegations regarding sexual misconduct at the Company. Activision CEO Bobby Kotick reportedly had known for years about alleged sexual assault at the Company, but did not inform the Board.3 The Securities and Exchange Commission, Equal Employment Opportunity Commission, and California Department of Fair Employment and Housing have launched investigations into how Activision has handled these allegations.4 In our opinion, Activision can help repair its employees’ trust in the governance of the Company by adopting this proposal. We also believe that adopting this proposal will contribute to a needed refreshment of the Board by adding an employee perspective to Board deliberations. Finally, it is our view that an employee Board representative will help hold management accountable for employees’ concerns, including the prevention of workplace sexual harassment and assault. For these reasons, we urge a vote FOR this proposal.
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