Activision-Blizzard blames Microsoft merger after breaching California diversity law

Activision-Blizzard has blamed the Microsoft merger for failing to comply with a California workplace diversity law and appoint a third woman to its board of directors. The company has had since 2019 to do so, with the new requirements coming into effect at the end of 2021.

Activision-Blizzard’s near $70 billion merger with Microsoft has dominated gaming headlines since it was revealed in January 2022.

Microsoft promised the acquisition would allow the company to make “gaming safe, inclusive, and accessible to all” following multiple lawsuits being filed for workplace harassment and discrimination against Activision-Blizzard.

However, according to the company’s 2021 Annual Report filed in late February, Activision-Blizzard has failed to comply with a Californian law requiring them to put a third woman on their board of directors.

The Corporations Code and its “Women on Boards” requirement stated companies with an executive office located in California required a minimum of three women if the total number of directors was six or more.

The requirement came into effect at the start of 2019, giving companies three years notice.

Activision-Blizzard, at the time of publishing, has 10 board members. Only two of them ⁠— Reveta Bowers and Dawn Ostroff ⁠— are women. Elaine Wynn was previously a director on the board but left in 2020 and was replaced by Ostroff.

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The company blamed its upcoming merger with Microsoft for failing to comply.

“Under current California law, we were required to add an additional female director to our Board of Directors by the end of 2021. To meet this requirement and improve the diversity of our Board of Directors, the Company retained a search firm and began interviewing potential additional female directors in 2021,” it stated.

“However, since the Company’s current directors would cease to continue to serve on our Board of Directors upon consummation of our proposed transaction with Microsoft, we were unable to conclude the process in 2021. We will be continuing our efforts to appoint a new female director.”

The company maintains it has “worked to address concerns raised regarding our workplace and related matters.” This includes implementing an independent committee to oversee the implementation of new workplace policies, and the continued investigation of harassment and discrimination following the lawsuit.

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Activision-Blizzard also claimed “since 2016, the number of women in our game development leadership roles has more than doubled”, with 24% of their employees identifying as women or non-binary. The company aims to increase that by 50% over the next five years.

It is unclear if Activision-Blizzard will face any sanctions for breaching the Corporations Code.