Activision Says It Failed To Hire Another Woman For Its Board Due To Microsoft Deal Complications

Activision Blizzard claims that its violation of a California law that requires the company to have at least three women on its board of directors by the end of 2021 is due to complications with its upcoming acquisition by Microsoft, despite having three years to comply with the law.

First noticed by Axios, Activision Blizzard’s annual report for 2021 includes an acknowledgment that it failed to comply with a California law that requires companies headquartered in the state with at least six members on their board of directors to include at least three women on their boards by the end of 2021. The company currently has two women on a board of ten.

Activision Blizzard attributes its failure to appoint a third woman to its board to its upcoming planned acquisition by Microsoft, which doesn’t close until 2023.

“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. 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.”

Notably, however, Activision Blizzard has known it would need to comply with this law for some time. The law went into effect on January 1, 2019, at which time Activision Blizzard had two women on its ten-person board of directors: Reveta Bowers and Elaine Wynn. Wynn departed the board in 2020, at which time the company almost immediately appointed another woman, Dawn Ostroff, to replace her. The company has not appointed any other board members since Bowers’ appointment in 2018.

Talks between Activision Blizzard and Microsoft began in mid-November 2021 — just three days after a Wall Street Journal report revealed that CEO Bobby Kotick knew about the sexual assault and misconduct allegations happening at the company, but did not disclose them to the board of directors.

The California law in question has resulted in a dramatic increase in women appointed to board seats in the state. In the two years before the law’s enaction, only 208 women were newly appointed to board seats in California. In the two years after, 739 were appointed, and in the first quarter of 2021, women filled 45% of California board appointments.

This news comes while Activision Blizzard remains embroiled in a lawsuit from the state of California alleging the company fostered a “frat boy” culture in which women who worked there were subject to harassment, unequal pay, and a toxic working environment.

Activision Blizzard declined to comment further.