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Technology | Activism & Engagement

It’s no secret: the technology sector is booming. Currently, half of the world’s 10 largest companies by market capitalisation are US-based tech companies: Microsoft, Apple, Amazon, Alphabet and Facebook.1 And not far behind them are hundreds more tech firms, in the US and other countries, with billions of customers and billions more in revenue and profit. These companies urge consumers around the globe to embed digital technologies in almost every aspect of everyday life. They promise to honour and protect users’ privacy. And, increasingly, they promise that their artificial intelligence (AI) and machine learning technologies will lead to huge breakthroughs across fields such as business, science, medicine, transportation, housing and government. Yet today, this same tech sector is in many ways confronting an existential failure. While espousing values of innovation, ease and openness, the tech sector stands accused of facilitating social divergence and helping to dissolve social cohesion on a global scale. Regulators and legislators in multiple countries charge tech companies with privacy violations affecting hundreds of millions of people. And, as more and more companies deploy data-driven technology to target advertisements to potential buyers, recruit new employees and offer loans and mortgages, research shows these tools can bring about massive unintended harms and discriminatory outcomes. At Open MIC – the Open Media and Information Companies Initiative – we believe that tech companies must develop policies and practices that provide transparent oversight. It’s essential that they account for the impact of tech products and services on people’s lives and our social contract. Failure to do that, we believe, is bad business. Founded in 2007, Open MIC is a US-based non profit that works to foster greater corporate accountability in the media and technology sectors. Our primary tool is shareholder engagement. We work closely with investor partners – sustainable, responsible, impact (SRI) investors – who operate from the organising principle that responsible corporate behaviour is better business. We aim to deploy the collective power of investment management and advisory fi rms, mutual fund companies, foundations, pension funds and advocacy groups to help shape corporate media policies and practices.

The shareholder fight to curb ‘surveillance capitalism’ and other emerging risks

Myanmar or New Zealand or Pittsburgh. At YouTube, on multiple occasions, leading global advertisers have withdrawn advertising that appeared adjacent to online hate speech. Those risks to companies have concerned shareholders and prompted action. In 2018, Open MIC facilitated a public sign-on letter Michael Connor seeking support for shareholder proposals Executive Director, Open MIC from Facebook’s largest institutional investors, attracting signatures from Open MIC promotes values of openness, more than 80 civil and human rights equity, privacy, diversity and transparency organisations as well as investors with – values that provide long-term benefits for $62billion in assets under management. companies, the economy and the health of Following Facebook’s annual meeting, society. The goal is to foster the kind of open Open MIC’s analysis of the ‘independent’ internet and tech ecosystem that enabled shareholder vote – the investor vote the early and unprecedented success of excluding shares of CEO Mark Zuckerberg these companies in the fi rst place. and other Facebook insiders – showed Open MIC is unique in its application of that some 51 per cent of outside investors shareholder engagement to the tech sector. had supported a proposal to establish a But the broader shareholder engagement board-level risk committee and 41 per cent process is well-established in US fi nancial voted for a proposal demanding markets. SRI investors have for decades a report on how Facebook is managing provided corporate management and content governance, including on issues of boards with input on a wide range of election interference, so-called ‘fake news’, corporate governance and public policy hate speech and harassment online. matters, such as climate change, political Two weeks later, Facebook’s board spending and lobbying, of directors responded executive compensation and to pressure from shareholders Data is the governance, civil rights and and quietly adopted important lifeblood of human rights, and more. and substantial changes to Shareholder proposals the charter of one of the board’s the digital frequently highlight committees, renaming economy and key company-specific and/or the committee to include systemic issues that pose now the most the responsibility for ‘risk’ significant risks to companies, broadening its mission valuable asset and the economy and society. With to include oversight of issues for many the explosion of new digital that have placed the social technologies, Open MIC’s media platform at the centre of technology work highlights emerging global controversy, including companies risks confronting not only privacy, data use, community tech companies but business safety and cybersecurity. globally sectors of all types, globally. Th is year, alongside shareholders, such as the New York The risks of ‘social’ media State Common Retirement Fund and For several years, Open MIC has worked Arjuna Capital, Open MIC continues to with shareholders to press leading social press Facebook, Google and Twitter on media platforms – Facebook, Twitter ‘content governance’ policies. Separately, and Google – on issues that have exposed Open MIC is working with multiple the companies to significant legal, fi nancial organisations to encourage shareholders and regulatory risk. When dialogue with to withhold their vote for Mark Zuckerberg the companies has failed, Open MIC has as a member of Facebook’s board – to send organised proposals to be voted on by a strong signal of shareholder discontent shareholders at the companies’ annual to the company founder, who also controls general meetings. a majority of its shares. Data is the lifeblood of the digital Facial recognition and economy and now the most valuable asset surveillance capitalism for many technology companies globally. The phrase surveillance capitalism, But the potential value of data – including popularised by Harvard Business School’s its fi nancial value – is impacted by Shoshana Zuboff, refers to the economic consumers’ trust in companies to safely pressures that incentivise companies’ manage theirs. The social media platforms commodification of personal information have been widely criticised, for example, in the digital age – separating society for the role that online hate speech has into the ‘watchers’ and the ‘watched’. played in violence offl ine, whether in Spring 2019 | Ethical Boardroom 77

Profile for Ethical Boardroom

Ethical Boardroom Spring 2019