King Zuck: Above the Law? Yeah, Maybe
December 20, 2018
Though today’s major tech companies can, willingly or accidentally, make startling impacts on society, corporate executives are still primarily accountable only to their shareholders. And in the case of one of the largest and most beleaguered companies, Vox informs us, “Mark Zuckerberg is Essentially Untouchable at Facebook.”
Reporter Emily Stewart begins by recounting some recent criticisms lobbed at the company. First, the New York Times described Facebook’s deliberate efforts to downplay controversies from the Cambridge Analytica data breach to the spread of Russian propaganda on their platform. Then there is the Wall Street Journal’s report that Zuckerberg considers his company to be “at war,” and that both morale and stock prices are in decline. And yet, the digital king remains untouchable. Stewart writes:
“He reiterated the point in an interview with CNN Business this week, saying that stepping down as chairman is ‘not the plan.’ And the thing is, no one can make him. Even before the latest scandals, there have been questions about whether too much influence within Facebook has been placed with Zuckerberg and, among some investors, pushes for him to renounce his position as chair of the board. But because of the way Facebook’s shareholder structure is set up — and the number of shares Zuckerberg holds — there’s no way for anyone to force him out. Facebook may be a publicly traded company, but Zuckerberg pretty much makes the rules.”
The write-up outlines the reasons Facebook’s corporate structure means Zuckerberg always gets the most votes, and notes most corporations are set up this way. (See the article for those details.) It continues:
“That means that whatever shareholders are voting on — typically at Facebook’s annual meeting, usually in May — Zuckerberg and those closest to him are always going to win out. Bob Pisani at CNBC estimated earlier this year that Zuckerberg and the group of insiders control almost 70 percent of all voting shares in Facebook. Zuckerberg alone controls about 60 percent.”
Not that shareholders are silently accepting this status quo. A number of them have made proposals that would limit their famous CEOs power, including bringing in an “independent” board chair. Mysteriously, though, none of those proposals have received enough votes to pass.
But in the back of my mind is the sharing of private communications, the loss of private images, and the orbital sander approach to helping an ethical compass find true revenue.
Cynthia Murrell, December 20, 2018
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