Voting “Against” a Shareholder Proposal
Home Depot: Report on prison labor in the supply chain Shareholders submitted a proposal requesting Home Depot report on its policies applicable to prison labor in its supply chain. ClearBridge determined that a vote Against this proposal was warranted as the company already reports on its policies, programs and oversight mechanisms concerning prison labor in its supply chain in its Responsible Sourcing Standards, 2020 Responsible Sourcing Report, Supplier Manual, and on its corporate website. The company updated its responsible sourcing program in 2021 to state that suppliers must not use forced, bonded or indentured labor, or prison labor, including voluntary prison labor. The company conducts announced and unannounced on-site audits of certain manufacturers. The audits assess, among other things, whether there is any use of prison labor. No audits identified prison labor. The company is a member of the Responsible Business Alliance’s Responsible Labor Initiative, which requires its members to commit to labor standards across their supply chains.
Microsoft: Prohibit sales of facial recognition technology to all government entities ClearBridge voted Against this proposal. Microsoft’s Regulatory and Public Policy Committee of the board has oversight responsibilities over policies and programs that relate to artificial intelligence. Microsoft has stated it will not sell facial recognition technology to police departments in the U.S. until strong regulation, grounded in human rights, has been enacted. The company’s responsible AI principles state that, among other requirements, in its terms of service Microsoft will prohibit the use of facial recognition technology to engage in unlawful discrimination and will advocate for safeguards for people’s democratic freedoms in law enforcement surveillance scenarios and will not deploy facial recognition technology in scenarios that it believes will put these freedoms at risk. The company appears to be taking steps to implement responsible measures in its development and deployment of AI in general and facial recognition technology more specifically. As stated by the board, a general prohibition of sales of facial recognition technology to all government entities would prevent government customers from deploying facial recognition technology in societally beneficial use cases. Without strong evidence to suggest that the company and the board are neglecting a material risk, decisions about its product offerings are best left to the company’s management and board. There does not appear to be strong evidence to suggest that management and the board are neglecting a material risk, and the proposal’s request is overly prescriptive.
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