Activist shareholder organisation SOC Investment Group has written a letter urging Activision Blizzard shareholders not to re-elect six board members, including CEO Bobby Kotick.
The annual general meeting of Activision Blizzard is set to take place on June 21. The current board of directors are up for re-election which has prompted SOC Investment Group to write an open letter urging shareholders not to re-elect six of the ten board members. These are Bobby Kotick, Brian Kelly, Robert Morgado, Robert Corti, Barry Meyer and Peter Nolan.
The reasoning given by SOC is as follows: “Each of these directors failed either to recognize that Activision Blizzard for years maintained unsafe workplaces exhibiting frequent and repeated sexual harassment, sexual assault, and gender discrimination, or to appropriately address the Company’s “frat house” culture once it was publicly revealed by the California Department of Fair Employment and Housing (“DFEH”) in its pending lawsuit, which was filed in July 2021.”
SOC Investment Group urges shareholders of #ActivisionBlizzard to vote against six directors who failed to address the company’s sexual harassment crisis. #CorpGov #EndSexualHarassment #ToneDeafAtTheTop
Read our letter here:https://t.co/qiT2zVDPT0 pic.twitter.com/uZivpdOlpA
— SOC Investment Group (@SOCInvGrp) May 27, 2022
The letter then goes on to outline some of the shortcomings of the current Activision Blizzard board in two sections entitled “Inadequate Response to the Sexual Harassment Crisis” and “Deeply Flawed Governance”.
In the former, SOC is deeply critical of the response of Activision Blizzard leadership to the allegations outlined in the DFEH’s lawsuit, saying the “passivity” of the board is “inexcusable” given “the gravity of the situation at Activision.” They believe the board has not taken actionable steps to improve the situation at the company.
In the latter section, SOC Investment Group outlines the failings of Activision Blizzard’s corporate structure. “Activision’s board is comprised of an unusually high number of extremely long-tenured executives” including Kotick (since 1991), Kelly (1995) and Morgado (1997). Furthermore, they are critical of the concentration of authority at Activision Blizzard, using the numerous responsibilities of Morgado as an example.
In the final stage of the letter, SOC once again asks for the six aforementioned directors to be voted out. They believe this is the bare minimum that should be done to start the process of fixing the work culture at Activision Blizzard.
While it seems highly unlikely that the board won’t simply be re-elected, SOC Investment Group’s efforts have borne fruit in the past. They led an effort by shareholders to stop a pay package that would see executive pay rise at Electronic Arts in 2020 and were almost successful in getting shareholders to reject an executive pay package at Activision Blizzard last year.
In other gaming news, Sega will be revealing a mystery project of theirs in an upcoming broadcast.
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