At Facebook’s annual shareholder meeting, a shareholder stepped up to the microphone and asked Mark Zuckerberg if he’d be willing to cede some of his power in the organization, perhaps by stepping down as CEO or chairman of the board. Zuckerberg holds both those positions now. He also holds 60% voting power on any issue as well as full veto power.
First Zuckerberg gave a long indirect answer in which he called for government regulation and referenced his plans for an outside advisory board that would make judgments on harmful content. (Such a group, if it existed, might have made the call on whether the recent Nancy Pelosi deepfake video should have been removed.)
But Zuckerberg didn’t answer the question. The questioner asked again, more directly, but was told by the moderator that she only got one question.
Shareholder asks Zuckerberg if he'd be willing to separate Chair and CEO role and cede supervoting shares.
Zuck repeats prepared comments about regulation.
Shareholder tries to steer Zuck back to answering her actual question.
Moderator says only 1 question per person, next.
— Alexei Oreskovic (@lexnfx) May 30, 2019
The shareholder—Natasha Lamb, the managing partner of Arjuna Capital—is one of a growing number of investors calling for serious changes at the top, either by separating the roles of board chair and chief executive (Zuck has both) or losing him as CEO completely.
They’re right to do it. If you want to change Facebook, you have to change Mark Zuckerberg.
The reason is simple: Zuckerberg is Facebook and Facebook is Zuckerberg. The company, in word and in action, is the product of his vision, talent, ambition, moral compass, and worldview. And Zuck’s is a single-minded vision that has not changed much since 2010. His capacity for making real change is limited, as is Facebook’s.
We’ve seen many efforts to ask Facebook, or force Facebook, to respect data privacy and operate more transparently. None are likely to work.
FTC fines won’t make Facebook more transparent and responsible about data privacy. It will pay them and go on with its business. Nor will privacy regulation–Facebook will either influence the way the law is written or find a way to get out of following the spirit of it. Breaking up Facebook would still leave the core public social network–where the data harvesting, fake news, and election meddling happen–intact.
But we know he won’t listen, b/c he holds 58% voting control in the company. pic.twitter.com/iUOw5OJRxf
— Fight for the Future (@fightfortheftr) May 30, 2019
If you can’t change, or won’t change, you become very good at creating the look and sound of change. Facebook has a long track record for apologizing for its mistakes without ever really fixing them, then going back to business as usual.
Since the Cambridge Analytica scandal, it’s taken this art to new levels, I’d argue.
It’s hired thousands of people to search and destroy toxic content on its site. It’s hired respected journalists to deal with the fake news problem. Lately it hired three well-known privacy proponents. It just announced it was banning white supremacists.
Some of this investment might end up creating positive effects within Facebook, but that would be a by-product of the effort. Its real aim is to mollify both users and regulators enough to keep the advertising business humming along as usual.
Zuckerberg, Sheryl Sandberg, and other Facebook executives are telling the world that Facebook is becoming a “privacy-focused platform.” Zuckerberg says this privacy ethic will be infused into the deepest levels of the company–into the way it builds products and does business. Zuckerberg spoke contritely about his company’s privacy record at F8, then predicted that the massive reach of public social networks will give way to smaller, more private digital spaces. He did not explain, and still hasn’t, how his company’s advertising business–loved by marketers for its massive reach to diverse and finely segmented audiences–will work in small private digital spaces.
There are some good reasons to remove Zuckerberg as CEO or board chair, or to limit his voting power. Beyond his 57.7% of voting shares, Zuckerberg holds too much power over the company, say two groups calling for an executive shake-up, Majority Action and Color of Change. They point to recent departures by the company’s chief product officer and the executives of WhatsApp and Instagram, and the newest nomination to its nine-person board of directors, Peggy Alford, who comes from an executive position at his social cause-focused Chan Zuckerberg Initiative.
But Wall Street and most Facebook shareholders aren’t looking for a change at the top.
Before Zuckerberg’s exchange with the questioner during the Q&A, shareholders introduced several measures to limit his power. None of them passed. The board had recommended against them.
In a later question, another shareholder asked Susan Desmond-Helmann, Facebook’s lead independent director, if she would call for an executive session about handing Zuckerberg’s chairman’s role to someone else. “The answer is no,” she said. “The company and I and the board of directors are comfortable with the current operating arrangement, where Mark is chairman and CEO.”
Why didn’t Zuckerberg answer the shareholder’s question more directly? I’ve heard him give sharp and direct answers to analysts and journalists. My guess is that he thought that if he answered the question directly or, worse, in a defensive way, it may have given the question more legitimacy.
At any rate, everybody in that room knew the central fact of the matter: Facebook’s stock is up 30% in 2019.