May 29, 2018
SumOfUs Also Urges Investors to Support Proposals for Risk Oversight Committee, Content Governance Report
MENLO PARK, CALIFORNIA -- Ahead of Facebook’s annual general meeting of shareholders on May 31st, SumOfUs, an international consumer group, is rallying Facebook shareholders and investment funds to withhold on the election of Mark Zuckerberg to its Board of Directors, and vote for shareholder proposals #4 and #5, to appoint a risk oversight committee and issue a content governance report respectively.
Last week, Lisa Lindsley, Capital Markets Advisor for SumOfUs, penned an exempt solicitation letter to Facebook shareholders outlining the organization’s argument for how shareholders should vote at Facebook’s upcoming annual general meeting. In the letter, Lindsley explains:
“Facebook CEO Mark Zuckerberg has also held the role of Board Chair since 2012. We are asking you to withhold support from Zuckerberg's re-election to send a message that you support independent board leadership and more robust oversight of Facebook management. Over half of non-insider shareholders supported our 2017 shareholder proposal for an independent Board Chair at Facebook. In 2018 the case for independent board leadership is stronger than ever. While shareholders do not elect corporate management, we do elect members of the Board of Directors, and Zuckerberg should no longer hold both positions.
“The lack of independent oversight of Zuckerberg by the Board of Directors has contributed to adverse developments at Facebook which have increased the company’s reputational risk, legal risk, regulatory risk and staff turnover. The original motto for Facebook was “Move Fast and Break Things,” synonymous with Zuckerberg’s young leadership. But in the past two years, Facebook has broken more than the Internet--it has censored human rights activists; facilitated the spread of fake news; and undermined democratic processes in the United States, United Kingdom, and elsewhere. Zuckerberg has been apologizing to shareholders and stakeholders for well over a decade while using a dual-class share structure to control voting power that vastly exceeds his economic interest in Facebook.”
In addition to direct pressure on Facebook shareholders, SumOfUs members have used the organization’s ‘OurPension’ tool to directly email their pension and investment funds, urging them to withhold on item #1, the election of Mark Zuckerberg to the Board of Directors, and vote for shareholder proposals item #4 and item #5, to appoint a risk oversight committee and issue a content governance report respectively. More than 1,537 emails have been sent to over 212 pension funds ahead of the meeting.
Earlier this month, renowned proxy advisor firm Institutional Shareholder Services (ISS) announced that they are backing calls for accountability at Facebook and urging shareholders to to support a number of recommendations and proposals from advocates. Echoing SumOfUs’ recommendations, ISS explained:
- Vote “WITHHOLD” on the election of Mark Zuckerberg to the Board of Directors of Facebook, Agenda Item 1.
- Vote “FOR” on Trillium Asset Management’s Shareholder Proposal Four to appoint a Risk Oversight Committee.
- Vote “FOR” on Arjuna Capital’s Shareholder Proposal Six to investigate Facebook’s content governance policies (including election interference, fake news, hate speech, and censorship).
Last year, more than half of Facebook’s non-insider shareholders supported a proposal from SumOfUs, an international consumer advocacy organization, to adopt an independent board chair to address issues related to greater public transparency and accountability. SumOfUs argued that an independent Chair of the Board would be better able to oversee the executives of the company, improve corporate governance and set a more accountable, pro-shareholder agenda.