Business & WORKPLACE CONDITIONS

2323 Broadway, Oakland, CA 94612   

Investing with Purpose  

October 11, 2019 Ken Xie Chief Executive Officer Fortinet Inc. 899 Kifer Road Sunnyvale, CA, 94086 Dear Mr. Xie, Nia Impact Capital is a growing investment management firm, based in Oakland, California. At Nia, our core objective is to generate a competitive rate of return, while creating a positive impact for investors and for our planet. The companies in which Nia invests meet our strict high impact, solutions-focused social and environmental standards. We expect our portfolio companies to show strong fundamentals and growth characteristics, offer unique products or services with high potential for long-term growth, and operate in a manner that makes clear the company’s commitment to people, the planet and corporate social responsibility. We invest in businesses that fall within sustainability themes addressing global systemic risk; we see Fortinet as fitting within our Education, Communications, and Financial Services themes. At Nia, we take a long-term view, embracing a buy and hold philosophy. Our intention is to hold Fortinet for many years, for as long as the business continues to show sustainable growth prospects. Our understanding is that 14 % of the Board and that 27% percent of the executive team are women. This low level of representation is concerning as extensive research indicates that board, executive and team diversity have a positive correlation with returns. Studies include, yet are not limited to:

 McKinsey & Company found that companies in the top quartile for ethnic and cultural diversity on executive teams were 33% more likely to have industry-leading profitability. Top quartile companies for gender-diverse executive teams were 27% more likely to outperform bottom quartile companies.81

81 Hunt, Vivan. Delivering through Diversity. McKinsey & Company, June 2018, www.mckinsey.com/business-functions/organization/our-insights/delivering-through-diversity.

2323 Broadway, Oakland, CA 94612   

Investing with Purpose  

 The International Monetary Fund (IMF) has linked the gender diversity of senior management to positive firm performance. This link was particularly strong in sectors reliant on critical thinking and innovation.82

 PwC has reported that 79% of board directors believe that diversity enhances board performance and more than half believe it enhances company performance.83

 Corporate Governance: An International Review has reported that empirical research indicates both return on assets and return on investment are positively correlated with board diversity.84

 ISS Analytics has found that gender diversity on the executive team is linked to company out-performance.85

 Sustainalytics has found that the management of human capital has alpha that “is positive, economically material and statistically significant.”86 Its research indicates that abnormal returns exist for momentum-based strategies associated with improving human capital management practices.

We are writing to those companies within Nia’s Global Solutions portfolio with an average gender representation under 25% on either their Board of Directors or their executive team. We have reviewed the information that Fortinet has published on its diversity and inclusion practices. We found no public statements by Fortinet that spoke to its diversity and inclusion programs. We also found no public statements by Fortinet that set quantitative goals related to its staff diversity. We would like to discuss with you Fortinet’s approach to equity and inclusion in its workplace and with contracted employees. In order to understand the sufficiency of

82 Christiansen,, Lone. Gender Diversity in Senior Positions and Firm Performance: Evidence from Europe . International Monetary Fund, Mar. 2016, www.imf.org/external/pubs/ft/wp/2016/wp1650.pdf. 83 “The Governance Divide Boards and Investors in a Shifting World .” Governance Insights Center, PwC, 2017, www.pwc.com/us/en/governance-insights-center/annual-corporate-directors- survey/assets/pwc-2017-annual-corporate--directors--survey.pdf. 84 Erhardt, Niclas, et al. “Board of Director Diversity and Firm Financial Performance.” SSRN, Corporate Governance: An International Review, Vol. 11, 23 June 2003, papers.ssrn.com/sol3/papers.cfm?abstract_id=416337. 85Papadopoulos , Kosmas. “Women in the C-Suite: The Next Frontier in Gender Diversity .” ISS Analytics, ISS, 27 July 2018, www.issgovernance.com/file/publications/women_in_the_c-suite- the_next_frontier_in_gender_diversity.pdf. 86“ESG Risk Ratings White Paper, Vol 1: Moving up the Innovation Curve.” Sustainalytics, 12 June 2019, www.sustainalytics.com/esg-research/thematic-reports/esg-risk-ratings-innovation/.

2323 Broadway, Oakland, CA 94612   

Investing with Purpose  

Fortinet’s diversity and inclusion practices, we seek context on its approach to workplace equity across three key themes:

1) Diverse Representation in Leadership; the company’s commitment to diverse candidate pools for the Board and for executive leadership.

2) Barriers to Workplace Equity; the company’s use of policies known to enable harassment and discrimination.

3) Corporate Disclosure; the quality of the company’s current disclosure and its utility to investors.

Diverse Representation in Leadership We did not find a mandate within the Nominating and Corporate Governance Committee Guidelines to seek out diverse board candidates, although the consideration of gender and race, among other factors, is cited. We are looking to better understand the process your company follows to identify diverse candidates for board and executive team openings. We are seeking, in particular, to understand if Fortinet has a formal process for identifying diverse candidates that aligns with the Business Roundtable’s 2016 Principles of Corporate Governance which stated that Boards should "develop a framework for identifying appropriately diverse candidates” for open board seats.87 Best practice in this regard is for a company to commit to including multiple diverse applicants in their candidate pool. This inquiry is particularly relevant to Fortinet, as it will be subject to California Senate Bill No. 826, which will require an increase in female board members by 2022. Barriers to Workplace Equity Our research was unable to determine if your company requires its employees to sign arbitration, non-disclosure or non-compete agreements. We are seeking information on Fortinet’s use of these policies and their impact on your employees, workplace culture and corporate risk profile. The use of these clauses have been linked to the unexpected loss of top leadership, damaged brand reputations, board liability, reduced employee contribution, legal risks, settlement costs, and long-tail risks in uncertain regulatory environments. Arbitration, in particular, has been identified as a practice which allows harassment and discrimination to exist in “a culture of silence that protects perpetrators at the cost of their victims.”88 Disclosure Practices

87 Principles of Corporate Governance. Business Roundtable, 2016, s3.amazonaws.com/brt.org/Principles-of-Corporate-Governance-2016.pdf. 88 Letter to Congress: RE:Mandatory Arbitration of Sexual Harassment Disputes. National Association of Attorneys General, 12 Feb. 2018, myfloridalegal.com/webfiles.nsf/WF/HFIS- AVWMYN/$file/NAAG+letter+to+Congress+Sexual+Harassment+Mandatory+Arbitration.pdf.

2323 Broadway, Oakland, CA 94612   

Investing with Purpose  

We found no quantitative disclosure from Fortinet on the diversity composition of its employees. To assess the effectiveness of Fortinet’s diversity and inclusion program, as well as to benchmark it against its peers, we are asking that you share its promotion, retention, and recruitment rates broken out by the groups identified in your non- discrimination policy, and set against total organizational composition. If this data is not available, we ask that you please share with us the criteria Fortinet is using to assess its diversity, equity, and inclusion programs and why these data points were selected. Nia is not unique in its interest in this data. This summer, investors representing $1.74 trillion signed onto an Investor Statement calling on companies to release meaningful, comparable data related to their workplace equity practices. The statement asserted “It is essential that investors have access to the most up-to-date and accurate information related to diverse workplace policies, practices, and outcomes.“ You may also be aware of investor initiatives which seek an increase reporting on human capital management practices, the release of equal employment opportunity (EEO) data, disclosure of pay gap data, the integration of executive pay with sustainability metrics and the strengthening of parental leave policies. We encourage you to also be responsive to these. We look forward to discussing this important topic with you. To begin our conversation, I can be reached through Meredith Benton, [email protected] or at 978-304-2234. Sincerely, Kristin Hull, Ph.D. Founder, CEO Cc. Gary Locke, Board of Directors, Fortinet Inc. Investor Relations Meredith Benton, Whistle Stop Capital, Consultant to Nia Impact Capital