When investors ask serious questions about corporate practices, they deserve more than a brusque dismissal. Yet that appears to be how Microsoft responded to a shareholder proposal filed by the National Center for Public Policy Research (NCPPR). (Microsoft’s answer came in the form of an opposition statement to the proposal, which is on file with the author of this op ed.)
The proposal sought basic transparency about the company’s European Security Program and its potential implications for political expression. Instead of engaging, Microsoft waved away the concerns, insisting that it “fail[s] to see” how its activities could chill free speech. That answer is not good enough.
The shareholder proposal at issue was straightforward. It asked Microsoft to clarify whether its work in Europe—particularly in partnership with governments and nongovernmental organizations—could expose the company to pressures that would compromise viewpoint neutrality. Shareholders should be told what safeguards exist to prevent European-style speech restrictions from influencing how Microsoft’s technology is employed. The proposal did not ask the company to change its business model or stop protecting customers from cyberattacks. It asked for transparency.
Microsoft’s opposition statement seemed designed to shut down the conversation rather than open it. The company appeared to assert that defending against cyberattacks is unrelated to free expression, as though the two issues exist in isolation. But investors know that the line between cybersecurity and speech regulation is not always so neat. Authoritarian regimes, and even democratic governments, sometimes justify censorship under the banner of “safety” or “security.” That is why shareholders are right to ask how Microsoft ensures that its partnerships in Europe do not bleed into viewpoint discrimination.
There are reasons for concern. Independent watchdogs have flagged Microsoft for ideological bias in how it evaluates and manages content. Reports from the 1792 Exchange (here and here) and Alliance Defending Freedom’s Viewpoint Diversity Score project (here) point to a pattern of one-sided decision-making that tends to disfavor conservative or dissenting perspectives. Then there are the House Judiciary Committee subpoenas from earlier this year related to apparent corporate involvement, including Microsoft, in censorship of U.S. citizens at the behest of foreign governments. None of this proves that the company’s European programs are censorious. But it does demonstrate a track record that justifies scrutiny.
Equally troubling is Microsoft’s lack of engagement with NCPPR, the shareholder proponent of the proposal. While SEC rules contemplate corporate engagement with proposal proponents, and Microsoft’s own public disclosures tout its commitment to engaging with shareholders, Microsoft never engaged NCPPR on this matter beyond sending its opposition statement. (Elsewhere, Microsoft states: “Effective corporate governance includes regular, constructive conversations with our shareholders to proactively seek shareholder insights and to answer shareholder inquiries.”) If Microsoft is confident its programs pose no risk to free expression, why not walk NCPPR through its reasoning? Why not demonstrate safeguards? Silence only invites suspicion.
Then there is Microsoft’s reliance on the Global Network Initiative (GNI) as a proxy for accountability. In its opposition statement, the company pointed to its founding membership in GNI as evidence that it takes free expression seriously. Yet shareholders are entitled to ask whether GNI oversight is sufficient. Where are the conservative voices in that process? Does the initiative provide real ideological diversity, or does it reinforce the same perspectives shareholders are already concerned about? All these concerns could ultimately be unfounded, but by not engaging NCPPR directly Microsoft just fosters suspicion.
To be clear, no one is disputing the importance of cybersecurity. Protecting citizens and institutions from digital threats is a vital service. Nor is anyone claiming to have definitive proof that Microsoft’s European Security Program will inevitably be repurposed to include censorship. NCPPR would welcome evidence that these fears are unfounded. But the absence of such evidence—combined with the company’s seemingly dismissive response only underscores the need for greater transparency. For example, the proposal specifically references two concerning organizations that tout their commitment to combatting “online hate speech” and “harmful content” directly identified by Microsoft as participating in the program, but Microsoft either ignores the substance of those concerns or ignores the named entity entirely.
Shareholders are not asking for micromanagement of Microsoft’s operations. They are asking for accountability on a matter that goes directly to reputational and financial risk. If Microsoft were found to be complicit in ideologically driven censorship abroad, the fallout could significantly damage shareholder value. As NCPPR notes in its proposal, Facebook lost roughly $134 billion in market value in connection with the Cambridge Analytica scandal. Transparency is the best protection against that outcome.
Microsoft’s leadership had an opportunity to reassure investors by addressing the proposal seriously. Instead, it chose to minimize the issue and rely on vague appeals to trust. That may be expedient in the short term, but it is shortsighted in the long run. A company of Microsoft’s size and influence cannot afford to appear indifferent to legitimate shareholder concerns about free expression.
The path forward is simple: engage with critics, demonstrate safeguards, and commit to viewpoint neutrality in all partnerships. If Microsoft is as confident as it claims, it should have nothing to hide. Until it does so, shareholders are right to keep asking hard questions.
