Facebook Shareholders Propose Removing Mark Zuckerberg From Chairmanship Position

| October 18 , 2018 , 10:23 IST

In the aftermath of several high-profile scandals, 4 major US public funds that hold shares in Facebook Inc on Wednesday proposed removing co-founder and Chief Executive Officer Mark Zuckerberg from the chairman position of Facebook.

The proposal was co-filed by state treasurers from Illinois, Rhode Island and Pennsylvania, and New York City Comptroller Scott Stringer, Reuters reported. A similar proposal by shareholders seeking an independent chairman for Facebook was defeated in 2017 as Zuckerberg's majority share in the company make outsider resolutions effectively symbolic. As per a company filing from April, Zuckerberg has around 60 percent voting rights.

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Seth Magaziner, Rhode Island State Treasurer said that the new proposal was still worth filing as it was a way to draw attention to Facebook's problems and how to solve them.

“This will allow us to force a conversation at the annual meeting, and from now until then in the court of public opinion,” Magaziner said to Reuters.

The proposal, to be presented at Facebook's annual shareholder meeting in May 2019, asks the board to create an independent board chair to improve oversight, which is a common practice at other companies. The proposal cites controversies that have hurt the reputation of Facebook, the world's largest social media network, such as the proliferation of fake news, unauthorized sharing of user information and foreign meddling in elections.

According to Illinois State Treasurer Michael Frerichs, while an independent chairman might not have prevented all the issues that have taken place, “there might have been fewer of these problems and less of a drop in share price” at Facebook.

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While opposing the proposal for an independent chair in 2017, Facebook said that it would “cause uncertainty, confusion, and inefficiency in board and management function and relations.”

In April this year, Facebook Inc confirmed the data leak of personal information of around 87 million people with political analyst firm Cambridge Analytica, data which was used to influence US presidential elections.  

In June, Facebook admitted that 14 million of its users had been affected by a bug in May which would automatically make private posts public. The 'private posts' were visible by anyone, including those not logged on Facebook.

Most recently, on September 28 Facebook confirmed that it had faced a security issue which resulted in the hacking of 50 million accounts, and the vulnerability of 40 million others. As a result, Facebook has logged out accounts of a total of 90 million users.