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Microsoft's board of directors votes against independent report into military contracts

U.S soldier using Microsoft Hololens

Microsoft has released its proxy statement ahead of its annual shareholders meeting in December. In it, the companys board of directors advises shareholders to vote against two proposals for independent reports to be conducted into Microsofts military contracts.

Proposal four, submitted by Boston Common Asset Management and Impact Investors, concerns the ethics of how the US government uses Microsofts technology. Proposal five, submitted by Harrington Investments, cites the potential impacts of being involved with development of weapons for the US military.

Both proposals include statements made publicly by Microsoft employees about their disagreement on involvement with military contracts.

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Proposal four specifically raises concerns with Microsofts HoloLens technology in Integrated Visual Augmentation System (IVAS) and the companys bid for a 10-year, $10bn contract with the Department of Defense for the Joint Enterprise Defense Infrastructure (JEDI). Both of these contracts were protested by employees in open letters, which seemingly fell on deaf ears.

Proposal four was rejected by the board of directors due to its belief the report would not “advance the interests of Microsoft, its shareholders, or other stakeholder”. It elaborated further, stating it was committed to working with the US military as part of its 40-year long relationship with the Department of Defense.

The board countered concerns about violations of privacy, civil and human rights, as well as conflicts with Microsofts own corporate social responsibility pledges, by stating it would “engage in discussions with the countrys institutions”, including Congress and the military.

The board was also vague in its response to employee concerns, saying it respected each individuals opinion. “We have an approach that ensures that people who have such concerns can raise them, and we work with theme to the extent feasible to addres these concerns,” it stated.

Proposal five was rejected for the same reasons as proposal four, despite its call for an investigation into the reputational and financial risks for Microsoft and not breaches of human rights. The board reiterated its commitment to the companys relationship with the military, and to not withhold technology.

The verdict on the proposals wont be finalised until the shareholders meeting takes place on 13th December. You can read Microsofts full proxy statement filed to the SEC online.

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