On April 26, 2022 Clean Yield Asset Management delivered the following statement at the 2022 IBM Annual Meeting in support of its proposal requesting that IBM report on the potential risks related to its use of concealment clauses in the context of harassment, discrimination, and other unlawful acts. The text of the proposal can be found here and an exempt solicitation filed by Clean Yield in support of the proposal can be found here.
Clean Yield Statement in Support of Item No. 6 at the 2022 IBM Annual Meeting
April 26, 2022
Good morning, Mr. Chairman, Board of Directors, and my fellow shareholders. My name is Molly Betournay and I submit the following statement on behalf of my firm, Clean Yield Asset Management, and the filer of this proposal, the Jay Stanley Weisfeld Trust.
Our proposal, item No. 6 on the proxy ballot, calls on the Board to report on the potential risks to IBM associated with its use of concealment clauses in the context of harassment, discrimination, and other unlawful acts. Concealment clauses are any employment or post-employment agreement, such as arbitration, nondisclosure, or non-disparagement agreements that IBM asks employees to sign which would limit their ability to discuss unlawful acts in the workplace, including harassment and discrimination.
We have filed this proposal because we are concerned that shareholders are unable to assess the breadth of discrimination and related risks within IBM given the Company’s apparent use of concealment clauses.
It’s no secret that IBM has faced serious allegations of discrimination. According to the EEOC, IBM has engaged in a pattern of age discrimination. There have been other recent findings of discrimination based on race, gender pay, and pregnancy at IBM. And these are just the matters that we know about because, according to the The New York Times, IBM began requiring mandatory arbitration of discrimination claims in order to receive severance packages in 2014.
The Proponent believes that the use of concealment clauses poses risks to the Company and its shareholders including reputational damage, challenges complying with changing legislation (including California’s Silenced No More Act), and a potential surge in claims against IBM should laws continue to change.
Perhaps most importantly though, the use of these clauses may harm IBM in its efforts to recruit and retain top talent. Many companies have stopped using concealment clauses including peers Alphabet, Microsoft and others.
It is essential that the Board, in its responsibility to represent the best interests of shareholders, assess the implications of IBM’s use of concealment clauses and the sufficiency of its current oversight of these policies. Investors are not benefited by the ongoing use of a practice that is strongly associated with discriminatory workplaces and carries with it brand, legal, and human capital risks.
Fellow shareholders, if you have not already cast your votes, please vote yes on Item No. 6.
Thank you for your attention.