Facebook's major shareholders want Mark Zuckerberg out of Chairman's positionLast updated on Oct 18, 2018, 08:32 pm
Major shareholders of Facebook believe the tech giant is better off without Mark Zuckerberg as the Chairman and moved a proposal on Wednesday regarding the same.
Led by Trillium Asset Management, the treasurers represent New York City, Rhode Island and Pennsylvania.
A number of controversies drove the shareholders' decision, but it is unlikely it will translate to anything substantial.
Understanding why the stakeholders don't want Zuckerberg as Chairman
The proposal will come for a discussion during Facebook's stakeholder meeting next year.
About the proposal, New York City Comptroller Scott Stringer said Facebook needs to make the Chairman position independent.
"They have a social and financial responsibility to be transparent- that's why we're demanding independence and accountability in the company's boardroom," he said in an online statement.
Stringer talks about hard earned money of shareholders
"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 country, its shareholders, and ultimately the hard-earned pensions of thousands of New York City workers," Stringer added.
Controversies like Cambridge Analytica led to stakeholders' decision
At the center of this proposal is the number of controversies which shook Facebook in recent months.
The proposal mentions Russia's alleged meddling in US elections, Cambridge Analytica scandal, data breaching of users, the presence of fake news, and posts which led to violence in Myanmar, India, etc., as the reasons for the decision.
It also mentioned that Facebook affected mental health.
The proposal is just symbolic, removing Zuckerberg isn't easy
However, the proposal is just symbolic because of the way founder-CEO Zuckerberg built the company.
In what shows he likes to concentrate power to himself, Zuckerberg has majority voting power in the company.
Not only this, 75% of its Class-B stock has 10 times the voting power of a regular shareholder.
A new Chairman implies Zuckerberg's power will be restricted, but that is unlikely.
A similar proposal was voted down last year
Notably, this isn't the first time Zuckerberg's 'chair' is being threatened. Last year, the company voted down a similar proposition saying an independent chairman will only lead to 'uncertainty, confusion, and inefficiency in board'.
Responding to it, Facebook had said it already has a 'lead independent director' to respect the interests of the stakeholders.
It had maintained an independent Chairman might not necessarily improve things.