A group of shareholders has put forward a proposal to axe Facebook founder and CEO, Mark Zuckerberg from the board of the directors. Besides, the group claims that an independent chairperson would be better able to “oversee the executives of the company, improve corporate governance, and set a more accountable, pro-shareholder agenda.”
The idea of removing Mark Zuckerberg is proposed by members of the consumer watchdog group SumOfUs. It is an online group that campaigns to hold corporations accountable on a variety of issues including climate change, workers’ rights. Besides, it also takes on issues like human rights, corruption, discrimination, and corporate power grab.
According to a VentureBeat report, Intel’s former chair Andrew Grove said in the proposal, “The separation of the two jobs goes to the heart of the conception of a corporation. Is a company a sandbox for the CEO, or is the CEO an employee? If he’s an employee, he needs a boss, and that boss is the board. In fact, the chairman runs the board. How can the CEO be his own boss?”
Lisa Lindsley, the capital markets advisor for SumOfUs, revealed the details to aforementioned site. She said about 333,000 people signed the petition asking for the removal of Zuckerberg as the Chairperson. However, only 1,500 of them were actual shareholders in the company. “The shares held by four individual SumOfUs members enabled us to file this proposal,” she said.
Mark Zuckerberg To Be Removed From Board of the Directors
— Tech2 (@tech2eets) February 7, 2017
The proposal reportedly cites last year’s new capital structure approved by Facebook as an example of imbalance of power. Back in June, participants in the company’s shareholder meeting were asked to vote on a proposal to issue Class C shares in a bid to keep Zuckerberg in control. Although approved, Facebook is dealing with litigation brought on by at least one shareholder who claimed it was an unfair deal.
The intention behind the issuing of Class C shares was to give Zuckerberg power. Besides, he could continue his long-term vision and be a part of the company over the long term. The plan came after he announced in 2015 that he and his wife, Dr. Priscilla Chan, would be giving away 99 percent of his family’s shares to various groups. In fact, he took the decision in celebration his daughter’s birth, in a bid to promote child equality.
The proposal claims, “We believe the combination of these two roles in a single person weakens a corporation’s governance, which can harm shareholder value.” The proposal added, “We believe that independent board leadership would be particularly constructive at Facebook as our company faces increasing criticism regarding its perceived role in the promotion of misleading news; censorship, hate speech and alleged inconsistencies in the application of Facebook’s community standards guidelines and content policies..”
Facebook refused to comment on the shareholders’ proposal. However, it might issue a statement during proxy filing in April, as per standard practice with shareholder proposals. For more updates, keep reading this space.