Meta (FACEBOOK, INC.) | Independent Board Chair at FACEBOOK, INC.

Status
16.09% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
FB
Lead filer
Office of the Illinois State Treasurer
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • CEO / chair duality
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Technology
Company HQ country
United States
Resolved clause
Shareholders request the Board of Directors adopt as policy, and amend the bylaws as necessary, to require henceforth that the Chair of the Board of Directors, whenever possible, be an independent member of the Board. This independence policy shall apply prospectively so as not to violate any contractual obligations. If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chair.
Supporting statement
Facebook CEO Mark Zuckerberg has been Board Chair since 2012. His dual-class shareholdings give him approximately 58% of Facebook's voting shares while holding only 13% of the economic interest, leaving the Board, even with a lead independent director, with only a limited ability to check Mr. Zuckerberg's power. We believe this weakens Facebook's governance, accountability, and oversight of management. Selecting an independent Chair would free the CEO to focus on managing the Company and enable the Chairperson to focus on oversight and strategic guidance.

Facebook has resisted recent shareholder requests to separate these roles. The last two years, the same proposal received a majority vote of independent shareholders at the Company's annual stockholder meeting. In 2020, the proposal received support among 63% of independent shareholders, according to our calculations. Despite clearly demonstrated shareholder concern regarding the Board's leadership structure, the Company has not acted on this important signal from its non-insider shareholders.

Alphabet, Microsoft, Apple, and Twitter all have separate CEO and chairperson roles. More broadly, 61% of the S&P 1500 separated these roles as of March 2020.

We believe the lack of an independent board Chair and oversight has contributed to a pattern of governance failings, including Facebook missing or mishandling a myriad of severe controversies, increasing risk exposure and costs to shareholders.

Concentrating power in the hands of one person - any person - is unwise. Looking forward to future growth opportunities, we believe Facebook will benefit from enhanced risk oversight and corporate governance, helping to rebuild trust with investors, employees, users, and regulators. Transitioning to an independent board Chair is necessary to rebuild the company's reputation and to create a governance structure with the benefits of genuine accountability and meaningful oversight.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Office of the Illinois State Treasurer For
Dana Investment Advisors (Delisted) For
Bell Asset Management For It is our policy to vote for shareholder resolutions regarding an Independent Chair.
Anima Sgr For
Boston Trust Walden For
Universities Superannuation Scheme - USS For USS strongly supports the appointment of an independent Chairman.

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