Facebook’s Mark Zuckerberg has rejected calls for him to stand down as chairman, even as a nascent shareholder rebellion against his leadership gains steam.
In an interview yesterday with CNN the 34-year-old said: “I’m not currently thinking that that makes sense.”
Others disagree and the pressure is mounting. A growing number of investors and shareholders are calling for him to be dismissed.
A proposal to strip him of the role will be put to a vote at the company’s annual shareholder meeting in May 2019.
An “Insular” Boardroom
Scott Stringer, who serves as the comptroller (chief fiscal officer) of New York City, is among those agitating for a separation of powers at the social media giant.
Oversight at Facebook is critical. But with Mark Zuckerberg serving as both the CEO & Board Chair, we can’t trust Facebook to oversee itself.
Facebook needs an independent chair to provide real checks and accountability. This @nytimes editorial shows why. https://t.co/dclUYEjBci
— Scott M. Stringer (@NYCComptroller) November 17, 2018
In October he wrote: “We need Facebook’s insular boardroom to make a serious commitment to addressing real risks – reputational, regulatory, and the risk to our democracy – that impact the company, its shareowners, and ultimately the hard-earned pensions of thousands of New York City workers.”
“An independent board chair is essential to moving Facebook forward from this mess, and to reestablish trust with Americans and investors alike.”
Last year, approximately 51 percent of independent investors voted to oust him as chairman.
The motion failed as Zuckerberg holds Class B shares that give him the majority of the voting power.
The pension funds of New York City hold a sizable stake in Facebook, and have united with activist shareholder Trillium Asset Management, which owns some $11 million of Facebook stock, in calling for Zuckerberg to go.
Last month Illinois State Treasurer Michael Frerichs, Rhode Island State Treasurer Seth Magaziner, Pennsylvania Treasurer Joe Torsella, and New York City Comptroller Scott Stringer all backed Trillium’s motion that would make Board Chair an independent position.
They argued that “doing so is best governance practice that will be in the interest of shareholders, employees, users, and our democracy.”
The shareholder proposal, initially lead-filed by Trillium Asset Management in June, focuses on Facebook missing, or mishandling, a number of severe controversies including what it lists as:
- Russian meddling in US. elections,
- Sharing personal data of 87 million users with Cambridge Analytica,
- Data sharing with device manufacturers, including Huawei that is flagged by U.S. Intelligence as a national security threat,
- Proliferating fake news,
- Propagating violence in Myanmar, India, and South Sudan,
- Depression and other mental health issues, including stress and addiction, and
- Allowing advertisers to exclude black, Hispanic, and other “ethnic affinities” from seeing ads.
“We are entering a new phase of Facebook’s growth,” said Jonas Kron, a senior vice president at Trillium last month.
“As we confront the ways in which Facebook’s technology has outstripped our ability to understand how it affects society, it is time to put limits on Zuckerberg and make some structural changes. At a time like this, we really need to have independent board leadership that can provide strong guidance and enforce real accountability.”
See also: The Facebook Hack: Three Days On, What We Know
“A lot of the criticism around the biggest issues has been fair, but I do think that if we are going to be real, there is this bigger picture as well, which is that we have a different world view than some of the folks who are covering us,” Zuckerberg told CNN Business’ Laurie Segall at Facebook’s headquarters in Menlo Park, California.
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