Building a more inclusive workplace: Microsoft releases action plan following independent review

At Microsoft, we take our commitment to creating a safe, inclusive work environment for all employees very seriously. In keeping with this commitment, today we are announcing new steps to prevent discrimination and harassment, following a 2021 proposal that was approved by Microsoft’s shareholders.

Based on this proposal, Microsoft’s Board of Directors engaged the law firm of ArentFox Schiff LLP to conduct an independent review of the company’s sexual harassment and gender discrimination policies and practices. ArentFox has completed its work and has provided the Board with a report detailing its findings and recommendations. In addition, the Microsoft management team has prepared an implementation plan that addresses all the recommendations in the ArentFox report. In many cases, the recommendations build on and extend work already in progress. The Board has thoroughly reviewed the ArentFox report, and it has approved the specific actions in the implementation plan.

Today the company is publishing a full transparency report from ArentFox as well as a summary of management’s implementation plan. The transparency report can be viewed here. This 50-page report contains all the findings and recommendations made by ArentFox, with only limited confidential and privileged information omitted (as suggested by the terms of the shareholder resolution last year). Management’s implementation plan can be viewed here.

“Cultivating a culture where everyone is empowered to do meaningful work and can thrive is our greatest responsibility at Microsoft,” said Satya Nadella, Chairman and CEO, Microsoft. “The Board of Directors has taken this investigation seriously and the resulting comprehensive report outlines important areas where we can continue to improve, as well as progress we’ve made. The Board of Directors and our senior leaders are fully committed to this implementation plan as we continually work to close the gap between our espoused culture and the lived experience of our employees.”

We believe that today’s plan will further strengthen Microsoft’s culture and build upon a broad array of existing policies, trainings, and complaint and investigative procedures. While we have taken meaningful steps in recent years to make improvements in all these areas, we recognize that this work requires a journey and not a single destination, with a commitment to continuous self-improvement.

We also remain committed to broad transparency. We therefore will continue to regularly update our employees and stakeholders on our progress and look forward to sharing the results of this work in the future.

Board Approved Implementation Plan:

Comprehensive Policy Review: The company will implement a broad review of key policies critical to culture and compliance to improve employee ease of access, discoverability and awareness, as well as revisit appropriate policy owners in an effort to improve employee education and experience. HR and Legal will implement this recommendation by June 30, 2023.

Targeted Policy Revisions: The company will revise the Anti-Harassment/Anti-Discrimination policy to incorporate recommended language designed to provide employees with greater clarity on workplace behavioral expectations and investigation process. Similarly, the Conflicts of Interest policy will be revised to provide greater clarity on the definition of familial and romantic relationships and set forth an internal process for disclosure of certain consensual relationships. HR and Legal will implement this recommendation by December 31, 2022.

Broaden Awareness of Legal Rights: The company will amplify existing internal communications about employees’ rights to seek external relief for concerns raised under the anti-harassment and discrimination policies. HR and Legal will implement this recommendation by December 31, 2022.

Reinforcing Policies with Expanded Training: The company will enhance and expand existing training of new senior leaders and executives. HR and Legal will implement this recommendation by March 31, 2023.

Reconsideration Process: Currently, the company reviews requests for reconsideration of an investigation when initiated by an investigation party. Going forward, we will formalize and transparently post on an internal webpage available to all employees, the reconsideration process for investigation parties who identify any new information or information that was not considered during the investigation. The Workplace Investigations Team will implement this recommendation by December 31, 2022.

Investigation Survey: In March 2022, the company launched a survey to request feedback from employees who raise and respond to concerns to learn about their investigation experience. We plan to continue surveying investigation parties and will consider additional questions that will help us understand the employee experience. Utilizing survey data, we will consider potential connections to existing listening systems to improve insights and draw connections. Through our Employee Relations Steering Committee, we will create a regular review of aggregated feedback to inform action planning and continued improvements to our investigations process. The Workplace Investigations Team and the Global Employee Relations Team will implement this recommendation by March 31, 2023.

Investigative Process: In 2021, the company developed new investigation outcomes intended to address behaviors that are inconsistent with Microsoft’s values of respect, integrity and accountability but do not violate the Anti-Harassment and Anti-Discrimination policy. To create greater clarity with our employees on possible investigation outcomes, we will reconsider the terminology for substantiated policy violations and behavioral concerns. We will also provide additional training for Workplace Investigators and Global Employee Relations specialists on communicating those outcomes. The Workplace Investigations Team and the Global Employee Relations Team will implement this recommendation by December 31, 2022.

Post-Investigation Action and Employee Experience: In 2020, the company developed disciplinary guidelines for more principled and consistent decision-making. We will develop an auditing process to ensure that discipline is implemented and/or that HR follow up occurs by March 31, 2023. To reinforce Microsoft’s policy prohibitions against retaliation, we want to ensure that complainants in investigations do not fear negative consequences based on having raised a concern or participated in an investigation. We will take additional measures to make our employees aware of our policies. We will also consider ways in which we can strengthen our internal HR processes and communications to address perceptions of negative career impact. The Global Employee Relations Team will implement an auditing process by March 31, 2023, and additional measures with HR and Legal, also by March 31, 2023.

Leadership Accountability: We will implement changes to emphasize that senior leaders will continue to be held accountable for substantiated policy violations and behavioral concerns. These changes will include more regular reporting and expanded use of data and analytics by the Workplace Investigation Team and Global Employee Relations Team to earlier identify challenges and trends for use by the corporate Senior Leadership Team in discussions on talent, culture and acceptable leadership behavior. We will also develop a new cross-function process for discipline decision-making in investigations involving senior leaders and implement by December 31, 2022. The Workplace Investigations Team and the Global Employee Relations Team will implement the reporting aspect of this recommendation by March 31, 2023.

Training: We will review and enhance our training tools and reminder practices to facilitate the completion of required training by all employees. We will audit to ensure accountability. HR will implement this recommendation by December 31, 2022.

Transparency: As part of our continued efforts to increase transparency regarding investigations, we will continue to report on investigations to the Board. We will also publish anonymized disciplinary action data on an internal investigations webpage, which will include an informational video on our disciplinary guidelines and ranges of outcomes. Further, we will provide greater transparency to complainants by sharing more specificity about disciplinary actions in circumstances where discipline is otherwise not visible. Finally, we will begin annual public reporting on Microsoft’s implementation of our sexual harassment and gender discrimination policies, including the total number of reported sexual harassment concerns, percentage of those substantiated, and types of corrective actions taken (which span coaching and training, formal warnings, compensation impacts, demotion, and termination of employment). The Global Employee Relations Team will implement greater transparency with complainants by December 31, 2022. The Global Employee Relations Team will publish anonymized disciplinary action data and an informational video by June 30, 2023.  The Workplace Investigations Team will begin annual public reporting by December 1, 2022.

Gender Diversity in Leadership Roles: The company will continue efforts to increase the percentage of women in leadership roles.  We will maintain accountability through external and internal aspirational goals and our continued commitment to highlight, discuss, develop and promote our internal and external female talent. The Senior Leadership Team will also continue with regular discussions on talent with a robust focus on growing and developing future senior leaders. We will also continue to focus on our talent sourcing and bench and our development programs to ensure we are continuing to create opportunities for women.  This work is already in progress and a focus on diversity will be an ongoing company priority. While there is not an end date for diversity-related aspirations like this, HR will report to the Senior Leadership Team on progress at least quarterly and at the end of the fiscal year.

Data & Systems Improvements: Investigations data and systems currently reside in separate tools. We will improve the coordination of the data systems and analytics by developing a plan for integrated tools for reporting and insights across the Legal Compliance and HR functions. The increased coordination will enable greater insights with speed and informed decision-making regarding investigations and culture. The Workplace Investigation Team and Global Employee Relations Team will implement enhanced coordinated reporting to the Microsoft Board of Directors by December 1, 2022, and improved coordination of data systems and analytics by June 30, 2023.

The leader of the Workplace Investigations Team (WIT) and the leader of the Global Employee Relations Team (GER) will be accountable for implementing the plan, with support from other key senior stakeholders in the Human Resources and Legal functions. Microsoft commits to complete this action plan by the close of fiscal year 2023, with some recommendations completed by the earlier dates noted above. The management implementation team will provide progress updates to the Chief People Officer and the company’s Vice Chair and President on a quarterly basis and will provide a completion report to the Board of Directors at the conclusion of the fiscal year.

As a result of this report and actions, we are confident that the implementation of these recommendations will not only address the specific concerns raised by ArentFox’s review, but will also allow us to build a stronger, more inclusive and equitable work environment for our employees moving forward. We look forward to continued growth and progress in these areas in order to maintain a culture where all of our employees can thrive.