Nadella confronted the subject last May, following reports that Bill Gates, Microsoft’s co-founder and original CEO, had pursued a sexual relationship with an employee in 2000.
Microsoft received a report on the matter, and a board committee looked into it. Gates left Microsoft’s board in 2020.
The law firm Arent Fox is handling the review. Arent Fox was hired by the United States Olympic and Paralympic Committee to review claims of abuse at national team rowing programmes. The US men’s coach, Mike Teti, ended up resigning in October.
The review will compare Microsoft’s handling of harassment with that of other companies, which goes further than what was requested in the Arjuna Capital-led shareholder proposal.
Arent Fox will submit a report to the board with recommendations, and executives said they will follow with a plan of action to show the board based on the recommendations. The board then plans to release a public report on proposed changes to company culture, if necessary.
Microsoft CEO Satya Nadella said in a statement that the company culture remains its number one priority and the board appreciates the critical importance of a safe and inclusive environment for all Microsoft employees.
“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. I embrace this comprehensive review as an opportunity to continue to get better.”
For his part, Nadella said anyone can bring up an issue, even if it’s two decades old, and the company will take action. The Microsoft board said that its report will summarise the results of investigations, including the one involving Gates.
The board report will also consider allegations of harassment and discrimination that female employees made in a 2019 email chain and the company’s response. In addition to the Gates case and the emails, the shareholder proposal alluded to a 2012 class-action lawsuit against Microsoft in which 238 employees alleged sexual harassment.
And in a lawsuit dropped in 2020, former Microsoft employee Katie Moussouris alleged that Microsoft had developed a habit of sex discrimination against women in technical and engineering positions. She said in her original 2015 complaint that in 2008 she had complained about a male director who was harassing other female employees.
Microsoft found that to be true but moved him to a different part of the organisation and allowed him to keep his title. Moussouris said she complained after the director retaliated against her by giving her a low bonus; he later received a promotion.
That lawsuit was dropped after the U.S. Court of Appeals for the Ninth Circuit affirmed a lower court’s ruling denying that it could proceed as a class-action case.