Top proxy advisor Institutional Shareholder Services (ISS) has recommended that Facebook investors vote in favor of two shareholder proposals, developed with support from Open MIC, aimed at improving the company’s performance on issues such as election interference, online harassment and risk management. ISS also recommended that investors withhold their support for five of the company’s directors, including CEO Mark Zuckerberg and COO Sheryl Sandberg. In a report last week, second-ranked proxy adviser Glass Lewis also recommended that investors support the two shareholder proposals.
Michael Connor, executive director of Open MIC, a nonprofit that works with shareholders to improve corporate accountability at technology and media companies, shared the following statement.
“We applaud Institutional Shareholder Services’ and Glass Lewis’ recognition of the urgent need for change at Facebook. The company and CEO Mark Zuckerberg have shown time and time again a lack of commitment and urgency to resolving the fundamental issues Facebook faces. Despite clear evidence of the problems it has created – from violating the privacy of millions of users; to enabling hate speech online that we know leads to harm offline; to influencing elections and enabling the spread of disinformation around the world – Facebook has offered little in the way of concrete commitments, simply offering ‘heartfelt’ apologies and vague changes.
“At any other publicly-held company, a CEO who allowed such offenses would have been fired by now. That’s why more and more investors are demanding that the company take real steps to address its past mistakes and prevent new ones – both for the safety of their investments and the well-being of billions of users around the globe.
“We urge shareholders to follow the ISS and Glass Lewis recommendations and support these common sense proposals:
A shareholder proposal filed by Arjuna Capital and The New York State Common Retirement Fund, and co-filed by Illinois State Treasurer Michael Frerichs, Baldwin Brothers, Inc. and Harrington Investments seeking a report on how the company is managing content governance (including election interference, fake news, hate speech and online sexual harassment propagated by the platform); and
A shareholder proposal filed by Trillium Asset Management and the Park Foundation, calling for the board to appoint a Risk Oversight Committee, the presence of which may have anticipated and mitigated today’s crisis.
Earlier this month, Open MIC and a group of 78 leading civil and human rights organizations and investors called on Facebook’s top institutional shareholders to support the two shareholder proposals outlined above. You can read the full text and see the full list of signers here.
Regarding the recommendations by the proxy advisory services, Natasha Lamb, managing partner, Arjuna Capital, said: “Facebook faces an existential threat if it can’t provide an authentic and safe user experience – users will simply leave. It’s high time investors have a transparent view into the scale of abuses on the platform and how the company is managing them over time. Otherwise we are gambling investor value on apologies and promises to do better.”
Jonas Kron, senior vice president of Trillium Asset Management, said: “The ISS and Glass-Lewis recommendations against Mark Zuckerberg and the board’s positions are a warning shot across the bow. While Facebook’s senior management and board may be busy putting out the current round of fires at the company, they would do well to look ahead at the board and governance structures because now is the time to make the needed changes.”