Should CEO Satya Nadella Cancel Microsoft’s Contract with ICE?

Madrolly

When Should a Board Encourage a Triple Bottom Line Philosophy?

Respondents to this month’s column provided a resounding “no” to the question of whether CEO Satya Nadella should accede to the wishes of a vocal minority of employees and cancel Microsoft’s contract with the US Immigration and Enforcement agency (ICE) over questions about how ICE conducts its business in handling immigrant families.

Many assumed a legalistic stance, reminding us that ICE, as a duly created agency of the government was only carrying out the mission assigned to it. As such, it is probably no more culpable than many other of Microsoft’s customers. Others gave more weight to moral considerations, especially in view of Nadella’s stated mission, “to put empathy at the center of everything I pursue …”

Only a few, however, put themselves in Nadella’s shoes, recognizing that the decision might require more than a yes or no response, particularly in view of his emphasis on organizational culture.

For example, Kisiah commented, “Microsoft should not get involved in politics. It does have employees and customers with all types of political views and should respect them. But if the company wants to claim moral leadership, it needs to carefully examine and discuss issues that cross the line from legal … to immoral. Microsoft needs to show its employees that it takes the issue of separation ( of families by ICE) seriously. How it does that requires discussion at the executive level.”

RAB put it this way: “I would caution Nadella to remember he has a duty to Microsoft shareholders. If at an annual meeting it was decided that a majority of shareholders supported the concept of not providing product and services to a government agency, I would support (it).” Ricky Fielding reminded us that, “The problem with cancelling the ICE contract is that it is probably one of hundreds of MS contracts with the government, many of which are supporting other potentially unpopular programs… Because MS is providing business infrastructure to ICE, cancelling the contract could actually harm efforts to reunite families.” “Dr J Do what is right” put it this way: “The organization’s culture is getting tested… My advice would be to quickly hold a series of town hall meetings with employees to gauge what they feel. More importantly, it needs to be a question for the Board—what do you consider moral leadership?”

The “case” appears not to be closed. It will not go away. Just last week, Nadella, at a meeting with new interns, was presented with a USB stick containing the names of 300,000 signatories, including 500 Microsoft employees, to a statement demanding that “Microsoft stop enabling ICE’s mission to punish families seeking safety.“ In the meantime, McKinsey quietly announced it would not pursue further contracts with ICE.

There are many ramifications to any effort to establish moral leadership, either in an organization or an entire industry. Just what that means is not always clear to employees, customers, and others. How will it affect the way policy is formulated and the manner in which decisions are made? To what extent will it determine who is to be hired and who is to be engaged as a customer or supplier? Is it worth the potential payoff from establishing a reputation for moral leadership?

Quansoo teed up the question nicely. “At some point, this could become a problem attracting the employees Microsoft wants to attract … It is refreshing to see a corporation’s leadership actually thinking about the consequences of its actions. I welcome this debate and concur that the board of directors needs to be thinking about it as well. Triple bottom line is coming whether all shareholders like it or not.”

When should a board encourage a triple bottom line philosophy? What do you think?

Original Column

Since becoming CEO of Microsoft in 2014, 25-year company veteran Satya Nadella, had, according to one report, “been positioning (Microsoft) … as tech’s moral leader.” The focus of Nadella’s attention was the organization’s culture. With comments such as “The C in CEO stands for culture,” he set about changing the company’s mission from “a computer on every desk and in every home” to one of “empower(ing) every person and every organization on the planet to achieve more.”

He was quoted as saying, “My mission is to put empathy at the center of everything I pursue—from the products we launch, to the new markets we enter, to the employees, customers and partners we work with.” He stressed the importance of developing “that deeper sense of empathy and compassion for everything around you” and finding “meaning in our work … work that will improve other people’s lives.”

These were significant departures from the messages sent by his predecessors.

“My mission is to put empathy at the center of everything I pursue”

Little did Nadella know that Microsoft would become caught up in the controversy concerning the treatment of immigrant families crossing the southern border of the United States Beginning in April, 2018, Attorney General Jeff Sessions had instructed the US Immigration and Customs Enforcement (ICE) agency to pursue a “zero tolerance” policy of arresting all those crossing the border illegally, requiring the separation of adults from children, as a means of discouraging further illegal entry (and some maintained immigration itself).

Microsoft had featured the work it was doing for ICE in a January blog post. Microsoft’s Azure Government software allows organizations to move operations and processing to the cloud.

Employees: Use technology for good

On June 19, an open letter was posted on Microsoft’s internal message board. “We request that Microsoft cancel its contracts with ICE, and with other clients who directly enable ICE,” the message said. “As the people who build the technologies that Microsoft profits from, we refuse to be complicit. We are part of a growing movement, comprised of many across the industry who recognize the grave responsibility that those creating powerful technology have to ensure what they build is used for good, and not for harm.”

Within 48 hours, over 300 (out of about 120,000) Microsoft employees had attached their names to the message.

The Microsoft employee message was characteristic of a growing concern within the high tech community about social issues and the use of its technology. Senior executives of Apple, Tesla, Google, Uber, and Cisco, among others, already had spoken out about the treatment of migrants. A collection, led by Mark Zuckerberg and Sheryl Sandberg, was being taken up for them on Facebook. On June 26, an article appeared on the web site of The Guardian titled, “When should a tech company refuse to build tools for the government?”

In a statement, Satya Nadella said the company’s contract with ICE “is supporting legacy mail, calendar, messaging and document management workloads,” not programs where children are separated from their families. Brad Smith, Microsoft’s president, posted a comment decrying the immigration policy on LinkedIn. That did not appear to be sufficient for some Microsoft employees. At least one tweeted asking how “working with ICE matched with the company’s ‘ethical stances.’”

Possible responses facing Microsoft ranged all the way from doing little or nothing in hopes that the protest would soon be forgotten to cancelling Microsoft’s $19.6 million contract with ICE.

As a trusted advisor to Satya Nadella, what, if anything, would you suggest he do now? What do you think?