Four major United States public funds that hold shares in Facebook Inc on Wednesday supported a proposal to remove Chief Executive Officer Mark Zuckerberg as chairman, reported Reuters. State treasurers from Illinois, Rhode Island and Pennsylvania, and New York City Comptroller Scott Stringer co-filed the proposal.
They joined hedge fund manager and activist organisation Trillium Asset Management, which tabled the proposal in June.
The proposal to remove Zuckerberg from the post follows Facebook’s alleged mishandling of a number of damaging social media controversies. In March, Facebook suspended Cambridge Analytica, a political data analytics firm, for violating its data privacy policies. The British firm, working for US President Donald Trump’s 2016 election campaign, was found to have harvested the data of 87 million Facebook users.
Facebook also failed to identify alleged Russian interference in the 2016 US presidential election. Zuckerberg acknowledged last month that his company had been late in discovering that foreign actors were running coordinated campaigns to interfere with the elections.
According to a company filing in April, Zuckerberg has about 60% voting rights.
Three of the four public funds had also supported another proposal that sought to remove Zuckerberg as chairman last year. However, the resolution was defeated after Facebook said an independent chair could “cause uncertainty, confusion, and inefficiency in board and management function and relations”.
The latest proposal, meant for Facebook’s annual shareholder meeting in May 2019, was still worth filing as it would draw attention to Facebook’s problems, said Rhode Island State Treasurer Seth Magaziner. “This will allow us to force a conversation at the annual meeting, and from now until then in the court of public opinion,” he said.
The proposal is seeking the creation of a board chair independent from the founder and the chief executive officer. Illinois State Treasurer Michael Frerichs said while an independent chair might not have prevented all the controversies, “there might have been fewer of these problems and less of a drop in share price” at the company.
In July, Facebook’s shares lost nearly a quarter of their value after its earnings for the April-June period missed market estimates. This was the first time Facebook missed analysts’ revenue projections since 2015. The company said it expected slow sales growth to continue for the rest of the year.
Facebook has a social and financial responsibility to be transparent, Stringer told CNN. “We need Facebook’s insular boardroom to make a serious commitment to addressing real risks – reputational, regulatory, and the risk to our democracy – that impact the company, its shareowners, and ultimately the hard-earned pensions of thousands of New York City workers,” he said.
Facebook last week said hackers stole personal details of 29 million people in September.