At AGM This Week, Company Now At The Crossroads
This year, the world finally recognized what Facebook investors have been saying for some time: The Facebook platform has serious and fundamental issues that the company, and the world, cannot afford to ignore. Shareholders, organized in part by Open MIC, have long been calling on Facebook to address critical issues, such as the platform’s role in enabling election interference, violations of privacy, “fake news” distribution, online hate speech and sexual harassment. Yet CEO Mark Zuckerberg and the company’s senior management have consistently brushed this all under the rug – until the recent Cambridge Analytica data scandal and other controversies finally forced these problems into the light and Zuckerberg himself into congressional testimony.
Zuckerberg and Facebook have recently embraced some corrective measures by committing to a full civil rights audit, and investors remain hopeful that new commitments translate to actual change. But Facebook has a long history of “apologies” and opaque promises that result in no real change. Open MIC’s timeline of engagement with shareholders shows Facebook’s increasingly visible pattern of making promises – without delivering.
Facebook to Shareholders: A Timeline of Denial
January 2017
The Obama administration publishes a report assessing Russian influence on U.S. elections.
February 2017
Facebook investor Arjuna Capital submits a proposal for the company to issue a report on the spread of fake news via the platform.
April 2017
On an investor call, Zuckerberg promises new jobs and more investment to address the proliferation of fake news.
Facebook publishes a white paper explaining a change in approach without mentioning Russia.
June – October 2017
Facebook publishes a series of blog posts promising vague changes to various policies, including hate speech, curtailing the spread of terrorism, combating misinformation, fighting fake news, Russian election interference, ad targeting, sharing Russian ad content with Congress and ad policies.
October 2017
Arjuna Capital and the state of New York retirement fund file a shareholder proposal calling for a report on content management policies.
Trillium Asset Management and the Park Foundation file a shareholder proposal for the creation of a risk oversight board committee.
March 2018
Reports reveal that Facebook improperly shared data from 87 million users with Cambridge Analytica.
April 2018
Zuckerberg testifies before Congress, once again offering vague promises and no concrete action.
Facebook publishes its proxy statement, urging investors to vote against the two shareholder proposals to promote better content management.
May 2018
In response to longstanding calls from civil rights organizations, Facebook commits to conduct a civil rights audit in coordination with the ACLU and a Washington, D.C. law firm.
A coalition of 78 individual and institutional investors, civil and human rights groups pen an open letter to Facebook’s top institutional shareholders urging them to join their colleagues and the civil rights community in holding Facebook accountable.
Top proxy advisory firms Institutional Shareholder Services and Glass Lewis urge shareholders to support the proposals on risk management and content governance.
We understand that there is no quick fix for these problems – in part because they have been left to sit and grow for years – and that the company will need time to address them. What’s needed now is credible and transparent commitment to improvement that enables shareholders and users to track and hold Facebook accountable. Shareholders have been calling for improvement for years, and it’s time for Facebook to catch up and prove itself accountable.
This year, Facebook has the opportunity to adopt two shareholder proposals that would show shareholders it is serious about change. These proposals, from Arjuna Capital and New York State Common Retirement Fund calling for a report on content governance and the effect of recent controversies, and from the Park Foundation and Trillium Asset Management, calling for the board to appoint a Risk Oversight Committee, are common sense steps the company can take that would have a critical impact. If Facebook is really committed to addressing serious violations, why would it oppose them?
With over 2 billion users, Facebook is one of the most powerful companies in the world. Its shareholders, its users and policymakers around the globe are calling for the company to reform harmful policies and ensure the platform is the space for positive connections that it always aspired to be. At this Annual General Meeting, Facebook has the opportunity to accept these shareholder proposals and show that it is moving forward. We are hopeful Zuckerberg and the rest of the company are ready to take these steps.
If you’d like to speak with the executive director of Open MIC, Michael Connor, please contact Sam Nurick at sam@upshiftstrategies.com.