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Alphabet faces call by pension groups for workers to join board

Large US and UK pension plans have backed a campaign to have worker representatives on the board of Alphabet, Google’s parent company, at a time of growing activism among Silicon Valley employees.

CtW Investment Group, which represents union-sponsored US pension funds with more than $250bn of assets under management, has written to other Alphabet shareholders, calling on them to support a proposal at the company’s annual general meeting next month requesting the nomination of an employee representative director.

In the letter, CtW said Alphabet was in the middle of a “cultural crisis” and suffered from a “permissive tone at the top”.

Dieter Waizenegger, executive director at CtW, said: “As Alphabet sits at an inflection point, facing widespread reputational and regulatory risk due to rising antitrust, data privacy and propaganda concerns, it cannot afford to ignore the growing turmoil within its workforce.”

Over the past year, Google employees have staged protests over what they saw as mishandling of sexual harassment cases and its controversial plans to launch a censored search engine in China, codenamed Project Dragonfly. Tech workers across Silicon Valley have become more vocal about ethical concerns, including over how artificial intelligence and facial-recognition systems are used in defence and security applications. 

With engineering talent among the most valuable and sought-after resources in Silicon Valley, industry leaders have been forced to respond to their employees’ concerns. A week after one protest, Google said it would end forced arbitration in cases of harassment and discrimination, a policy that had restricted employees’ ability to take the company to court. 

However, some of the organisers of November’s protest said in April that the company had punished them for raising their complaints. 

The ballot measure to give Google staff board representation follows two proposals at Amazon’s AGM this week, intended to curtail use of its Rekognition face-scanning system. Despite backing from proxy advisories ISS and Glass Lewis, the measures — which were opposed by Amazon — were defeated on Wednesday

CtW’s effort at Alphabet is supported by the Northern Local Government Pension Scheme, one of the UK’s largest, which manages £46bn on behalf of public sector workers in Merseyside, West Yorkshire and Greater Manchester.

The Northern LGPS was formed as part of the UK government’s drive to pool local authority pension funds and make them more efficient. It launched its responsible investment policy at the beginning of the year and has made worker rights one of its main priorities when seeking to change behaviour at the companies in which it invests.

“Effective management of people is both a source of value creation and competitive advantage for companies and the right thing to do. So there is a shared interest between companies, their workforce and their investors in getting this right,” said Ged Cooney, chair of Northern LGPS.

The fund plans to take a more active stance on worker rights and push for employer representation at the largest US tech companies.

“We invest in numerous companies where employees do have representation of this nature, and have no hesitation in supporting this proposal,” Mr Cooney said. “We hope that the Alphabet board will see the value in accepting the idea, and we are happy to support its employees in seeking representation.”

Alphabet’s shareholder list is dominated by large US mutual fund managers, with US and UK pension plans holding much smaller stakes of the business. But CtW and Northern LGPS hope they will be able to convince more prominent shareholders to support the resolution in the weeks running up to the June 19 AGM.

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