IBM Stockholders Reject Stand on Social Issues

Some 1,200 shareholders of computer giant International Business Machines Corp. descended here Monday to vote down four initiatives aimed at making their company take stands on social issues and to applaud management assurances that lackluster financial times are over.

“The impact of all our action toward a leaner, more aggressive company has begun to appear,” Chairman John F. Akers told a sympathetic audience at the annual meeting, among repeated bursts of applause. “We have a company better positioned Monday in our readiness to take on competitors in every niche of the marketplace,” Akers said.

Much of the two-hour meeting, held in the downtown Richmond Centre for Conventions and Exhibitions, was devoted to debate of a resolution calling on the company to halt sales to South Africa. It was offered by six IBM employees and various religious groups that own stock in the company.

‘Perpetuating White Rule’

Citing racial and political turmoil in the white-ruled country, IBM last year divested itself of its South African subsidiary, turning it over to the local employees. However, it continues to market equipment there, using the company, now called Information Services Management Pty. Ltd., as a sales agent.

James Leas, an IBM semiconductor engineer, said IBM hasn’t delivered on its promise to be a model of corporate responsibility in South Africa. “Selling technology almost exclusively to the white minority is wrong,” Leas said. “And IBM, by doing so, is perpetuating white rule.”

Akers, however, said the continued sales were justified. “ISM’s viability, and therefore the livelihood of its employees, as well as the servicing of customers, depends on its continued ability to offer IBM products,” he said.

He also noted that IBM had committed itself in 1985 to $15 million of grants aimed at helping South African blacks in education, business development and legal reform.

Akers said ISM is continuing fair employment practices that IBM began and would not sell IBM equipment to the police or other agencies that enforce racial separation.

Many shareholders were visibly impatient as representatives of church groups spoke for the resolution one after another.

Reputation Tarnished

One opponent took the microphone and asked: “If these people and institutions feel so strongly about IBM and South Africa, why don’t they divest themselves of IBM?”

The resolution got only 9.9% of the vote. The meeting also rejected, by even larger margins, resolutions to stop IBM from performing tests on animals, funding of abortions and to require it to disclose political contributions (the company says it makes none).

IBM’s reputation has been tarnished a bit in recent years because of sagging profits and speculation it was losing its edge.

Akers spent much of his address to the shareholders listing changes the company had made to remain competitive. Noting that income had picked up in the second half of the year after a weak showing in the first half of 1987, he said: “IBM again was the most profitable company in the world.”