Apple Shareholders File Proposal on Privacy and Data Security

For Immediate Release
September 24, 2012

Investors in Apple Inc. have filed a shareholder proposal asking the company to publish a report explaining how its Board of Directors is overseeing privacy and data security risks.

The proposal, which is intended for consideration by Apple shareholders at the company’s 2013 annual meeting, was co-filed by clients of socially responsible investment firms Trillium Asset Management LLC and Zevin Asset Management LLC. 

“Unauthorized collection, disclosure, or misuse of personal information can cause great harm to individuals and society - including discrimination, identity theft, financial loss, loss of business or employment opportunities, humiliation, reputational damage, questionable government surveillance or physical harm,” the proposal states.

The shareholders assert that “Apple’s Board has a fiduciary and social responsibility to protect company assets which include the personal information of a variety of stakeholders.”

According to the proposal, Apple has recently confronted a number of cyber security and privacy controversies - drawing the attention of Congress and outside groups. The controversies include unauthorized access to iPhone users’ address books; Unique Device ID related litigation and the release of one million UDIDs; and security concerns related to iCloud.
The shareholder proposal notes a recent study by the Ponemon Institute which found data breaches could negatively impact brand value and reputation by as much as 17 percent to 31 percent, with the average loss in brand value ranging from $184 million to more than $330 million.

In seeking a report, the shareholders state that “investors need to understand more fully how the Board is overseeing” concerns about privacy and data security.  The proposal references a recent study by Carnegie Mellon University’s CyLab which surveyed corporate governance and enterprise security practices at a number of leading global companies.

The shareholder proposal at Apple was developed in consultation with the Open Media and Information Companies Initiative – or Open MIC – a non-profit organization that works with shareholders and companies to foster more open and responsible media policies and practices. A copy of the Apple proposal is available here.

Michael Connor, Executive Director of Open MIC, said the Apple proposal followed months of research into privacy and data security risks at major U.S. companies, with a particular emphasis on corporate governance and the responsibilities of boards of directors. “We expect similar shareholder proposals on this critical issue will be filed at other firms in the coming months,” Connor said.

For more information:

Michael Connor
Open MIC
212-875-9381