After losing $200 billion in value since its peak in July, with stock plummeting 40 percent in only four months, Mark Zuckerberg’s longevity as Facebook’s chairman of the board is under attack, but he’s holding all the cards.
The next shareholder meeting will vote on a proposal that would lead to an independent board chairman, and shareholders are increasingly disillusioned with the social media giant, which has dragged them through the murky waters of sinister manipulation and the spreading of false information.
The blowback has been big, and Zuckerberg’s responses, insufficient, most recently culminating in a damning investigative report by the New York Times.
And while some will point out that Facebook’s stock plunge is just part of a wider tech selloff, others will point out that the social media giants fall from grace began before this.
Faced with all of this scandal, shareholders are now bemoaning the fact that they don’t have any control over what happens next, now that things have gotten out of hand. Zuckerberg owns 60 percent of the voting power here.
And things are about to get even wilder …
Over the weekend, British Parliament did something it’s never done before: It seized internal Facebook documents that had been acquired by a startup that is suing the company and brought into the UK by an American businessman.
While the lawsuit itself relates to an app designed to find bikini shots among the photos of Facebook users and friends, for British Parliament, they are much more important. Related: Apple Reels On Trump Tariff Threat
On Tuesday, a British lawmaker alleged that the seized documents show that a company engineer identified a major data collection effort based in Russia. It had never been disclosed before, the lawmaker—Damian Collins—alleged. Collins chairs a parliamentary committee investigating disinformation and the use of people’s data, which is a huge concern in Europe.
Facebook claims those documents, by U.S. law, have to be kept under seal:
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And it isn’t helping that Zuckerberg refused to show up for a hearing of the Grand Committee of Disinformation, attended by international parliamentarians on Tuesday.
Facebook is getting attacked globally now, with parliamentarians from nine countries at the hearing—though all they got was Facebook’s policy VP, Richard Allan, to question. In South America, they’re worried about the use of WhatsApp to spread political disinformation. In Sri Lanka, they want to know why Facebook refused to remove anti-Muslim hate speech. Belgium wants to know how Facebook is tracking its citizens who don’t use the platform and how that violates Europe’s new GDPR privacy regulations.
And the list goes on …
The problem for Zuckerberg now is that Facebook “has lost the trust of its constituency and to get it back they will need to do something significant,” CNBC quoted Daniel Newman, principal analyst at Futurum Research, as saying.
“Their PR ploys so far have been empty and insufficient, and with growth already stalling they need to start changing sentiment now,” he said.
Changing sentiment might be replacing Zuckerberg as chairman of the board and separating the role of chair from that of CEO, which is also held by him.
The new proposal that will be voted on in the next shareholder meeting in 2019 was floated in October by Trillium Asset Management, which owns some 53,000 shares in Facebook.
Trillium VP Jonas Kron told CNBC that all the scandals make it “abundantly clear that an independent board chair is necessary”.
But the question then becomes this: Can shareholders force Zuckerberg to give up the chair when he has 60 percent control? The answer is: No. If he’s going anywhere, it will mean he renounced the chair himself. His challenge now is to decide whether staying in the chair will be a social media suicide.
By Josh Owens for conil.me
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