Facebook Investors Want to Boot Zuckerberg After Scandals

Some major Facebook investors want to oust Zuckerberg after scandals

After a rocky year of privacy scandals, several major Facebook investors are calling for Facebook creator and CEO Mark Zuckerberg to be removed from his role as chairman on the board. On Wednesday, October 18, the state treasurers of Illinois, Rhode Island, and Pennsylvania along with the New York City Comptroller filed a proposal asking the board to make the Board Chair position independent from the company’s CEO. The four representatives of public funds with shares in Facebook joined a proposal filed by investment firm Trillium Asset Management earlier this summer.

Zuckerberg serves as both the CEO and the chairman for Facebook — the proposal points to the latter position, requesting the board make the chairman position independent from the company’s CEO role. The group says that making this change would not only be in the best interest of shareholders, but of employees, Facebook users, and U.S. democracy in general.

The proposal cites several recent controversies that have embroiled Facebook, including the Cambridge Analytica data-selling scandal and Russian interference in the U.S. elections. The list also charges Facebook with partial culpability for the violence in Myanmar, India, and South Sudan as well as allowing advertisers to exclude minorities, and spreading fake news.

Since the Cambridge Analytica imbroglio, Facebook’s share price have dropped and growth has slowed. The proposal was filed by Illinois State Treasurer Michael Frerichs, Rhode Island State Treasurer Seth Magaziner, Pennsylvania Treasurer Jo Torsella, and New York City Comptroller Scott Stringer.

“Boards of directors should be a check on management teams, not a tool of them, and an independent Chair is essential to achieving that result,” Torsella said in a statement. “That’s why I’m joining this effort, so that we can stand up for investors, and against the unchecked corporate power of Mr. Zuckerberg and the threat he currently represents to shareholder value.”

The group points out other major tech companies that have the chairman position separate from the role of CEO, including Twitter, Google, Microsoft, and Apple. The proposal suggests the change would help the company take a broader view.

The proposal isn’t the first attempt to remove the founder from his position on the board — a similar move was proposed last year. While this is a repeat request, the proposal isn’t likely to oust Zuckerberg. The CEO has about 60 percent of the voting rights on the board, according to Reuters.

Last month, Instagram’s co-founders resigned from the social media giant that also owns Instagram, Messenger, and WhatsApp.

Editors' Recommendations