Activist investor wants outside review of Comcast’s ‘failures to prevent workplace sexual harassment’

An activist investor with a track record of drawing attention to gender discrimination issues at large companies has called on Comcast to conduct an independent investigation into the company’s “failures to prevent workplace sexual harassment.”

Arjuna Capital, based in Boston, filed a proposed shareholder resolution asking Comcast for an independent review and a report on such failures, citing the need to avoid legal and reputational risk.

Comcast wants to exclude the proposal from resolutions that shareholders would get to vote on at its annual shareholder meeting, typically held in June. The Philadelphia-based media giant argues that the proposal deals with the company’s ordinary business operations, which are outside the purview of shareholders, according to a Jan. 31 letter it filed with the U.S. stock market regulator, the Securities and Exchange Commission (SEC).

Arjuna Capital’s proposed resolution cites NBC’s 2017 firing of former Today show host Matt Lauer over sexual harassment claims, and questions how NBC News has handled workplace sexual misconduct, among other things. The proposal said a report should assess how the company could better hold employees accountable when they cause harm.

The firm, which describes itself as a “sustainable and impact investment firm” that works with wealthy individuals and institutions, said it represents investors owning more than 1.4 million Comcast shares. Comcast has a total of 4.6 billion shares.

Natasha Lamb, a managing partner at Arjuna Capital, said in a statement that investors are concerned about the possibility of regulatory fines and court-imposed judgments. The firm’s resolution cited a $3 billion loss in the market capitalization of Wynn Resorts over two days following harassment allegations against CEO Steve Wynn. Lamb said Comcast’s intent to exclude the resolution before it can reach an investor vote is “not a credible corporate response.”

“On its face, the decision by Comcast/NBCUniversal to kill our sex-discrimination resolution before it reaches an investor vote suggests they just don’t get it,” Lamb added.

Comcast declined to comment, beyond the SEC letter.

In that document, a lawyer for Comcast cited SEC rules that allow companies to omit shareholder proposals if they deal with the company’s ordinary business operations. The SEC has said the policy is meant to confine ordinary business problems to management and boards of directors, “since it is impracticable for shareholders to decide how to solve such problems at an annual shareholders meeting,” according to the letter from Comcast’s lawyer, William Aaronson, of the Davis Polk & Wardwell law firm in New York.

The letter also said Comcast has revised policies related to sexual-harassment allegations and enhanced workplace training in 2017 and 2018.

Companies can ask the SEC’s Division of Corporation Finance for informal, nonbinding views on whether there is a legal basis to exclude shareholder proposals.

“We respectfully request the concurrence of the [SEC] staff that it will not recommend enforcement action against the company if the company omits the proposal,” Comcast wrote.

Lamb said Arjuna Capital will challenge Comcast’s attempt to block the proposal, arguing that “sexual harassment is beyond the purview of ordinary business, and represents a significant social policy issue that is exempt from exclusion.”

Arjuna Capital said it has persuaded major companies, including Wells Fargo, Mastercard, and Progressive, to publish gender and racial pay gaps. It filed 17 shareholder resolutions in 2019.

The firm’s proposal is backed by UltraViolet, a national woman’s group, which has called on Comcast to address its “toxic workplace culture.” The group circulated a letter signed by six current and former Democratic presidential candidates that called for an independent investigation.

NBCUniversal has come under fire for its handling of sexual assault allegations against Lauer. He was accused of raping an NBC colleague, Brooke Nevils, during the 2014 Sochi Olympics, according to an account in New Yorker staff writer Ronan Farrow’s book, Catch and Kill, released in October. Lauer has denied any wrongdoing, saying it was a consensual sexual encounter.

Farrow also reported that NBC managers were aware that Lauer behaved inappropriately before firing him.

NBC has said it fired Lauer as soon as managers learned of a sexual misconduct complaint against Lauer. The network also conducted an internal investigation that found NBC News executives weren’t at fault because there were no previous formal complaints. Critics have said NBC should hire an outside firm to conduct an investigation.