New York City joined Facebook investors, including three state governments, in pushing founder Mark Zuckerberg to give up the role of chairman after a string of security breaches and misuse of the platform by foreign agents during U.S. elections.
“Facebook plays an outsize role in our society and our economy" and has a social and financial responsibility to be more transparent, said New York City Comptroller Scott Stringer, whose job includes serving as the adviser for the fourth-largest pension fund system in the country, with assets of $197 billion. "An independent board chair is essential to moving Facebook forward from this mess."
State treasurers from Illinois, Rhode Island, and Pennsylvania are also backing the measure, originally filed by Trillium Asset Management in June, which calls for a vote at the Menlo Park, Calif.-based company's next general meeting.
Despite their holdings in Facebook, and the possibility of support from additional investors, passage of the proposal without Zuckerberg's support is an impossibility. Including his super-voting shares that each count for 10 shares of common stock, Zuckerberg controls 59.9 percent of investor voting power in the company, according to its April proxy filing.
Splitting the roles of chairman and chief executive officer, as companies including Google, Microsoft, and Wells Fargo do, would make the social media giant more accountable to its shareholders, said Illinois State Treasurer Mark Frerichs, who manages $28 billion in investments.
“Facebook’s governance structure continues to put its investors at risk,” Frerichs said in a statement. “We need to see more accountability of Mark Zuckerberg to the board of directors.”
Facebook declined to comment on Wednesday. A proposal to split the two roles in 2017, however, garnered support from only 11 percent of shareholders, according to a regulatory filing.
The company has previously said that requiring an independent chairman wouldn't provide "appreciably better" direction or performance and might instead lead to "uncertainty, confusion, and inefficiency in board and management function and relations."
Facebook has fallen 10 percent this year to $159.21 in New York trading as its CEO and other senior officials testified in repeated congressional hearings on efforts to fight misuse of its platform by foreign intelligence agencies like Russia's as well as claims of anti-conservative bias and attacks by hackers.
This fall, Facebook said cyber-thieves compromised 30 million accounts, compounding the scrutiny over a disclosure earlier this year that a consultant on President Trump's 2016 campaign improperly gained access to information on 87 million users.
Such issues, along with Google's admission that app developers are given access to Gmail accounts when users consent, has spurred increasing support for a federal privacy law that would give U.S. residents more control over their personal information.
While tech companies support the idea of uniform standards, they're keen to avoid some of the restrictions imposed in rigorous standards in the European Union and the state of California.