- Facebook is holding its annual shareholder meeting on Wednesday.
- Due to the pandemic, the meeting will be virtual for the first time.
- Shareholders are calling for Zuckerberg to relinquish his position as board chair and appoint an independent figure to the role.
- But Zuckerberg’s total control of the company through his shares makes the proposal certain to fail.
- Facebook has talked about the importance of independent oversight in other areas, but Zuckerberg has the final say.
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Facebook CEO Mark Zuckerberg is facing calls from shareholders to appoint an independent board chairman. But it doesn’t matter.
Because when it comes to governance of Facebook, only one shareholder matters: Mark Zuckerberg himself.
On Wednesday, the Silicon Valley-headquartered social networking firm is holding its annual shareholder meeting. Entirely virtual for the first time due to the ongoing pandemic, the meeting gives shareholders an opportunity to vote on proposals for changes in the company direction and confirm directors for the coming year.
One item on the agenda is a call for Zuckerberg to relinquish his position as chair of Facebook’s board of directors, and be replaced by an independent figure — a resolution backed by a consortium of State Treasurers and investors.
This is because Facebook’s unusual share structure allows its 36-year-old billionaire CEO to retain complete control of the company, with 57.9% of voting shares. Shareholders can complain, and propose various leadership changes and restructurings, but without Zuckerberg’s buy-in, they cannot do much more than that.
Indeed, the investor coalition calling for an independent board director predicts that a supermajority of outside shareholders — that is, shareholders who are not Zuckerberg or company insiders aligned with him — will vote for the change this year. It’s a significant sign of investor discontent, but it will ultimately have no impact.
Facebook enters its shareholder meeting with Zuckerberg more firmly in charge than he has been in years. After being buffeted by years of scandals, the chief exec has radically reshaped his board of directors over the last year or so — pushing out dissenting voices and replacing them with friends and allies, as The Wall Street Journal detailed in a recent investigation.
Facebook’s rhetoric in recent years has increasingly stressed the need for independent oversight.
The social network now outsources the work on verifying the veracity of questionable content to a network of third-party fact-checking services across the globe. It is building an “Oversight Board” that will be charged with reviewing decisions made by content moderators about controversial posts, acting as a quasi-“Supreme Court” for the social network. The digital currency effort Facebook birthed, Libra, is technically managed by a consortium of dozens of different companies that have bought into the project.
But when it comes to the final word at Facebook, there’s still only one man in charge.
Facebook’s annual shareholder meeting will take place online at 10 a.m. Pacific Time on Wednesday. Business Insider will be covering the event as it happens, so check back on Wednesday for the latest.
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