Facebook gives a ‘like’ to idea of board diversity
Facebook pledged Thursday to make its board of directors more diverse, even as investors used the company’s annual shareholders meeting to vent over management’s handling of recent data privacy, election manipulation and fake news scandals.
Chief Operating Officer Sheryl Sandberg announced that the company was partnering with the Service Employees International Union to institute a “diverse slate approach” for appointing new directors in the future.
Sandberg was responding to a question from civil rights activist the Rev. Jesse Jackson about why Facebook’s top 15 employees were all white.
Sandberg said the company has already worked to diversify its ranks by ensuring that more candidates from underrepresented groups get considered for openings, but said she agreed with Jackson “that we need more diversity.”
Earlier this year, Facebook appointed its first and only African American director, former American Express CEO Kenneth Chenault.
But the management-backed slate of current directors was approved, while shareholder-backed proposals to change the company’s voting structure to wrest control away from CEO Mark Zuckerberg were voted down. That was no surprise, since Zuckerberg effectively controls Facebook. He and a group of insiders own a class of stock that give them 10 votes per share, compared with common stock that carries one vote per share.
Investor James McRitchie proposed a measure that would have given non-insider shareholders a more equal voice, which would break up what he referred to as a “corporate dictatorship.” He also called on Zuckerberg to step down.
“George Washington was encouraged to continue as president for life, but he stepped down for the good of the country,” McRitchie said. “Mr. Zuckerberg could take a page from history, emulate George Washington, not Vladimir Putin.”
Christine Jantz, chief investment officer of NorthStar Asset Management of Boston, advocated for a proposal to make each share equal to one vote, especially in light of this year’s Cambridge Analytica scandal, which “exemplified the need for this shareholder rights overhaul.”
“If privacy is a human right, as stated by Microsoft’s CEO, then we contend Facebook’s poor stewardship of customer data is tantamount to a human rights violation.”
The audience applauded Zuckerberg as he started a question-and-answer session. He repeated themes he presented to Congress last month that the company was proactively moving to stamp out fake news and hate speech and auditing app makers to “make sure they don’t misuse people’s information in ways they don’t want.”