Text of Steve Ballmer E-Mail to U.S. Microsoft Employees Regarding Public Policy Engagement

Date: May 6, 2005

To: All U.S. Microsoft Employees

Subject: Microsoft’s principles for public policy engagement

During the past two weeks I’ve heard from many of you with a wide range of views on the recent anti-discrimination bill in Washington State, and the larger issue of what is the appropriate role of a public corporation in public policy discussions. This input has reminded me again of what makes our company unique and why I care about it so much.

One point really stood out in all the e-mails you sent me. Regardless of where people came down on the issues, everyone expressed strong support for the company’s commitment to diversity. To me, that’s so critical. Our success depends on having a workforce that is as diverse as our customers – and on working together in a way that taps all of that diversity.

I don’t want to rehash the events that resulted in Microsoft taking a neutral position on the anti-discrimination bill in Washington State. There was a lot of confusion and miscommunication, and we are taking steps to improve our processes going forward.

To me, this situation underscores the importance of having clearly-defined principles on which we base our actions. It all boils down to trust. Even when people disagree with something that we do, they need to have confidence that we based our action on thoughtful principles, because that is how we run our business.

I said in my April 22 e-mail that we were wrestling with the question of how and when the company should engage on issues that go beyond the software industry. After thinking about this for the past two weeks, I want to share my decision with you and lay out the principles that will guide us going forward.

First and foremost, we will continue to focus our public policy activities on issues that most directly affect our business, such as Internet safety, intellectual property rights, free trade, digital inclusion and a healthy business climate.

After looking at the question from all sides, I’ve concluded that diversity in the workplace is such an important issue for our business that it should be included in our legislative agenda. Since our beginning nearly 30 years ago, Microsoft has had a strong business interest in recruiting and retaining the best and brightest and most diverse workforce possible. I’m proud of Microsoft’s commitment to non-discrimination in our internal policies and benefits, but our policies can’t cover the range of housing, education, financial and similar services that our people and their partners and families need. Therefore, it’s appropriate for the company to support legislation that will promote and protect diversity in the workplace.

Accordingly, Microsoft will continue to join other leading companies in supporting federal legislation that would prohibit employment discrimination on the basis of sexual orientation — adding sexual orientation to the existing law that already covers race, sex, national origin, religion, age and disability. Given the importance of diversity to our business, it is appropriate for the company to endorse legislation that prohibits employment discrimination on all of these grounds. Obviously, the Washington State legislative session has concluded for this year, but if legislation similar to HB 1515 is introduced in future sessions, we will support it.

I also want to be clear about some limits to this approach. Many other countries have different political traditions for public advocacy by corporations, and I’m not prepared to involve the company in debates outside the US in such circumstances. And, based on the principles I’ve just outlined, the company should not and will not take a position on most other public policy issues, either in the US or internationally.

I respect that there will be different viewpoints. But as CEO, I am doing what I believe is right for our company as a whole.

This situation has also made me stop and think about how well we are living our values. I’m deeply encouraged by how many employees have sent me passionate e-mails about the broad respect for diversity they experience every day at Microsoft. I also heard from some employees who underscored the importance of feeling that their personal values or religious beliefs are respected by others. I’m adamant that we must do an even better job of pursuing diversity and mutual respect within Microsoft. I expect everyone at this company — particularly managers — to take a hard look at their personal commitment to diversity, and redouble that commitment.

The questions raised by these issues are important. At the same time, we have a lot of other important work to do. Over the next 18 months we’ll release a broader, more advanced and more exciting set of products than at any time in the company’s history. Let’s all recommit to the job ahead, using our diversity as a strength to work together creatively and with respect for each other.

Thanks.

Steve

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