December 01, 2020

Suit alleges that toxicity in the company hurts Pinterest’s “nice” brand image.

A group of shareholders is suing Pinterest and its board of directors, alleging that the company violated its fiduciary duty, wasted corporate assets, and abused its control by fostering a systematic culture of racial and gender discrimination that drove out women executives.

Pinterest's top executives and the board "personally engaged in, facilitated, or knowingly ignored the discrimination and retaliation against those who spoke up and challenged the company's white, male leadership clique," according to the suit (PDF). As Pinterest's user base heavily skews female, being publicly seen as a den of sexism and racism is damaging to the brand and therefore to the shareholders, the suit alleges.

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The suit is similar to suits filed by groups of Alphabet (Google) shareholders in 2019 alleging that the company failed in its fiduciary duty to shareholders when it allowed rampant sexual misconduct inside the company to persist and when it paid executive Andy Rubin millions to leave after credible accusations against him by a female coworker. The company and the shareholders agreed to a settlement in September that set aside about $300 million for future corporate diversity training and initiatives

The complete story can be accessed here.