Facebook’s shareholders have put out a proposal seeking removal of CEO Mark Zuckerberg from the board of directors.
The shareholders are members of online consumer watchdog group SumOfUs, and contest that a combination of roles as CEO and member of board of directors in a single person ‘weakens a corporation’s governance, which can harm shareholder value’.
A reported in Venture Beat cited Lisa Lindsley, the capital markets advisor for SumOfUs, who told the site a petition requesting Facebook to improve its corporate citizenship has been signed by 3,33,000 people out of which 1,500 were company’s shareholders. Lindsley, in a statement, said, ““The shares held by four individual SumOfUs members enabled us to file this proposal.”
Zuckerberg, who owns majority of company’s shares, can easily strike down the proposal along with other board members. Plus, Facebook has witnessed a strong growth under Zuckerberg’s leadership as the social media company cruised past Wall Street’s earnings and revenue expectations last week. Financial performance is the least of company’s problems right now, with a quarterly profit of $3.57 billion, more than double the $1.56 billion it reported a year ago.
Facebook has 1.86 billion users using its service monthly as of December 31, up 17 per cent from a year earlier.
The Facebook CEO has been a member on the company’s board of directors since 2012. In 2015, the Facebook CEO and wife Priscilla Chan pledged to donate 99 per cent of their company’s shares – about $45 billion – to advance human potential and promote equality for children.
The proposal demands independent leadership citing the increasing criticism against Facebook “regarding its perceived role in the promotion of misleading news; censorship, hate speech and alleged inconsistencies in the application of Facebook’s community guidelines and content policies; targeting of ad views based on race; collaboration with law enforcement other government agencies”. It calls for “public accountability” regarding the human rights impacts of Facebook’s practices.
Facebook came under the scanner for promoting fakes news on its platform in August last year after a 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 switched to a more algorithm-driven system for deciding ‘Trending’ topics.
Lindsely said the proposal is advisory in nature and will be put up for voting at the company’s annual investor meeting. “There could be a 99 per cent vote in favor of it and the board would not be under legal obligation to implement it. However, most competent board members realize that it is unwise to ignore the voice of the shareholders whose interests they are charged with representing,” she told Venture Beat.