As more employees quit Microsoft-owned Github over its ICE contract, Microsoft shareholders are deciding whether to add an employee to the board

• Microsoft shareholders are voting on a proposal to pave the way for a non-management employee to join the company's board of directors.
• The proposal cites a "strained" relationship with Microsoft employees over Microsoft's "alleged failure to curtail gender discrimination and sexual harassment," the company's relationship with ICE and a military contract to develop augmented reality headsets for soldiers that one group of employees said "crossed the line into weapons development."
• Voting on the proposal comes after about 150 employees at Microsoft-owned Github recently signed an open letter asking the company to cancel its contract with ICE. A small group of employees have even resigned over the contract, as recently as Tuesday.
• Microsoft's board recommended shareholders vote against the proposal, saying it undermines the company's board selection process and makes the board less independent.
• Microsoft is likely to share preliminary results of the vote during the company's annual meeting on Wednesday morning.
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As more employees quit Microsoft-owned Github over the company's contract with Immigration and Customs Enforcement, Microsoft shareholders are voting on a proposal that would give employees more power over company decisions.

A proposal was filed ahead of Microsoft's annual shareholders meeting on Wednesday to pave the way for a non-management employee to join the company's board of directors. The proposal cites a need for greater employee representation on the board amid backlash over the company's government and military contracts and alleged gender discrimination and sexual harassment.

Microsoft didn't disclose who was behind the proposal in the company's October proxy, but it became clear in a securities filing on Monday that it was submitted by a Boston-based activist investment firm called NorthStar Asset Management, which owns more than 75,000 Microsoft shares.

"We look at employee disenfranchisement and are concerned particularly about Microsoft ... there are all sorts of issues and repeated concerns with employees," the firm's director of shareholder activism and engagement Mari Schwartzer said, citing disputes such as Microsoft's own contract with ICE and a gender discrimination lawsuit filed against the company.

Microsoft has yet to respond to a request for more information.

Employee backlash

The proposal cites a "strained" relationship with Microsoft employees over Microsoft's "alleged failure to curtail gender discrimination and sexual harassment," the company's relationship with ICE and a military contract to develop augmented reality headsets for soldiers that one group of employees said "crossed the line into weapons development."

Voting on the proposal comes after about 150 employees at Microsoft-owned Github signed an open letter asking the company to cancel its contract with ICE, worth about $200,000. Github CEO Nat Friedman has defended the contract, saying it would be wrong to demand to know what customers do with Github tools.

A small group of employees have resigned over the contract, as recently as Tuesday, according to post from a Twitter user who identified themselves as a Github employee.

More than 100 Microsoft employees last summer signed on to an open letter urging the company to terminate its $19.4 million contract with ICE and stop working with the agency altogether. Microsoft CEO Satya Nadella downplayed the company's relationship with ICE in response.

Details about Microsoft's alleged failure to address gender discrimination and sexual harassment have surfaced in recent years including through a gender discrimination lawsuit and a leaked email chain in which employees shared their stories.

Women at Microsoft working in U.S.-based technical jobs filed 238 internal complaints about gender discrimination or sexual harassment between 2010 and 2016, court documents revealed last year.

Microsoft's response

Microsoft's board recommended shareholders vote against the proposal, saying it undermines the company's board selection process and makes the board less independent.

"Employees have numerous ways to be heard and exert influence outside of board representation," the company wrote in its recommendation against the proposal. "Establishing the best work environment we can for our employees is a key element of our continued success. Open and respectful communication is one of Microsoft's core values, and we have multiple channels for all stakeholders, including employees, to provide feedback to management."

Microsoft is likely to share preliminary results of the shareholder vote during the company's annual meeting on Wednesday morning.

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