HARRISBURG, PA — Pennsylvania State Treasurer Joe Torsella joined five other institutional investors to call for an independent board chair at Facebook, Inc. The investors have re-filed their proposal to separate the positions of Board Chair and CEO, which earned 68% support from shareholders outside of Facebook’s headquarters in May of 2019. The proposal will be voted on at Facebook’s 2020 Annual Shareholder Meeting.
“Facebook’s original motto was to “move fast and break things” but what has really been broken is the trust independent shareholders have in Facebook’s governance model that clearly isn’t working, and effectively lets Mark Zuckerberg be his own boss. Shareholders deserve an independent board chair to provide real oversight for the company. It’s time for Facebook to change by accepting better governance and oversight, and to rebuild the public trust it has lost over the past few years.”
Pennsylvania Treasurer, Joe Torsella
Facebook uses a dual-class share structure, which allows Zuckerberg and others inside Facebook to control voting outcomes of the company’s largest decisions, regardless of the vote counts from outside shareholders. At the last annual meeting, the proposal to separate these positions earned 68% support from outside shareholders—a dramatic increase from the 51% support it received in 2017.
The proposal is being co-filed this year by Treasurer Torsella, Illinois State Treasurer Michael Frerichs, New York City Comptroller Scott M. Stringer, Rhode Island General Treasurer Seth Magaziner, Connecticut Treasurer Shawn T. Wooden, and Trillium Asset Management.
“Now is the time for change. Facebook’s independent investors agree that it’s time for the company to separate the Board Chair and CEO roles. Right now, Mr. Zuckerberg is both Board Chair and CEO, serving as his own boss, and clearly it’s not working. The Board needs to be led by a strong, independent voice tasked to provide real oversight over management, address governance failings, help restore trust in the company, and better protect shareholders’ interests. We hope the company will use this as an opportunity to take a decisive step toward building a more successful, sustainable company for the long-term.”
Illinois State Treasurer, Michael Frerichs
“There is no check-and-balance at Facebook without an independent board chair – and Mark Zuckerberg’s totalitarian grip as both CEO and Board Chair must end. Facebook’s unrelenting turmoil shows why independence and accountability matter – and why power should not be consolidated around one person. Outside shareholders have sounded the alarm on the need for real oversight and governance reforms, and it’s time for Facebook to listen.”
New York City Comptroller, Scott M. Stringer
“We believe that Facebook’s lack of independent board Chair, along with inadequate board governance, has contributed to the mishandling of several ongoing controversies. Adopting an independent board chair structure will help diversify Facebook’s leadership and could help the company begin to re-build trust by incorporating additional accountability mechanisms into its governance structure.”
Rhode Island General Treasurer Seth Magaziner
“While Mark Zuckerberg has served as both chairman of the board and CEO, the company has faced congressional scrutiny of a number of missteps – from the role of its platform in propagating misinformation to releasing the personal data of tens of millions. A company as vast and as powerful as Facebook should be structured to ensure that there are appropriate checks and balances between the board and management.”
Connecticut Treasurer, Shawn T. Wooden
Source: Pennsylvania Treasury
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