Shareholders are holding Mark Zuckerberg’s feet to the fire on the heels following several high-profile scandals. The shareholders are members of online consumer watchdog group SumOfUs, objects that a combination of roles as CEO and member of the board of directors in a single person ‘weakens a corporation’s governance, which can harm shareholder value’.
The shares retained by four individual SumOfUs members to file a proposal requesting Facebook to recuperate its corporate citizenship, signed by 3,33,000 people out of which 1,500 were company’s shareholders.
A similar shareholder proposal seeking an independent chair was defeated in 2017 at Facebook, where Zuckerberg’s majority control makes outsider resolutions effectively symbolic. Facebook’s largest investors, the Vanguard Total Stock Market Index Fund and Fidelity Contrafund voted against the 2017 proposal, while the American Funds Growth Fund of America supported it.
Zuckerberg, who owns the majority of company’s shares, can easily smite down the proposal. In Addition, Facebook has witnessed an enduring growth under Zuckerberg’s leadership. Financial performance is the least of company’s complications right now, with a quarterly profit of $3.57 billion.
Facebook loomed under the scanner for promoting fake news on its platform in August last year after a Gizmodo report accused the company of editorial bias against US conservative news organisations in its Trending Section. Facebook denied the charges, and later removed human editors and swapped to a more algorithm-driven system for deciding ‘Trending’ topics.
Apple, Google, Microsoft, Oracle, and Twitter have separate CEOs and chairs. Some 59% of the S&P 1,500 have similar arrangements as of April 2018, reported the trillium-led group. Zuckerberg’s share of voting power among company investors is roughly 60%, according to Facebook’s latest proxy.
The proposal is advisory in nature and will be put up for voting at the company’s annual investor meeting. Sources claim that: “There could be a 99 per cent vote in benefit of it and the board would not be under legal obligation to implement it.”
Sources from Venture Beat professed that most competent board members understand that it is unwise to ignore the voice of the shareholders whose interests they are imputed with representing.”