Investors' requests have Microsoft delving into harassment probe

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Microsoft announced Thursday that it is conducting an investigation into how it reacts to workplace sexual harassment and gender discrimination, including how it handled complaints against co-founder Bill Gates.

The inquiry comes after investors' pressure, particularly during the annual company meeting in November, where over 78% of shareholders voted for increased responsibility in dealing with workplace sexual harassment concerns.

“We’re committed not just to reviewing the report but learning from the assessment so we can continue to improve the experiences of our employees,” said a statement by CEO Satya Nadella.

According to the Wall Street Journal, Microsoft's board engaged a legal firm in 2019 to investigate Gates after a Microsoft engineer claimed in a letter that she had a sexual connection with Gates for several years. Gates resigned from the Board of Directors in 2020.

Proposals by activist investors to modify business policy are rarely successful. Microsoft had asked shareholders to vote against the motion, which demanded that the firm review its harassment rules and publish a public report on them.

However, the investment firm sponsoring the plan, Massachusetts-based Arjuna Capital, expressed satisfaction with how the company has responded since the proposal was approved.

Natasha Lamb, co-founder and managing partner of Arjuna Capital, said she communicated with Microsoft on how the probe would continue. The board of directors approved the hiring of the law firm Arent Fox to conduct the review.

Lamb communicated in an interview Thursday that the worry is not only about the past, but whether that conduct is being addressed and mitigated moving forward. “At the end of the day, from an investor perspective, this is about how the company is treating its employees and whether it’s able to attract and retain talent.”

The Washington-based corporation said its public report would include an assessment of the success of its anti-harassment and anti-discrimination policies. It will also explain the findings of investigations into claims of harassment against board members and top officials, including the handling of Gates' 2019 probe, and identify ways to hold leaders responsible.