- The head of New York City pension funds’ investments thinks Mark Zuckerberg should step down as chairman of Facebook.
- It’s not going to happen – Zuckerberg owns a controlling stake of Facebook stock.
- But the call shows the level of investor anger at Zuckerberg’s handling of the data-privacy crisis.
An official who oversees investments for New York City’s pension funds thinks Mark Zuckerberg should step down as Facebook’s chairman.
Scott Stringer, New York City’s comptroller, called for an overhaul of Facebook’s board after the Cambridge Analytica scandal. He made the comments to CNBC, and we first saw the news via the Financial Times.
New York City’s pension funds hold an approximately $US1 billion ($1.3 billion) stake in Facebook. Stringer has called for an independent chairman to replace Zuckerberg, plus three new directors with experience in data and ethics to help police Facebook’s efforts in privacy.
“It is the eighth-largest company in the world,” Stringer said. “They have 2 billion users. They are in uncharted waters, and they have not comported themselves in a way that makes people feel good about Facebook and secure about their own data.”
He said the scandal showed there was “a risk to our democracy.”
Stringer said the funds wouldn’t pull their money out of Facebook but added “we do have the right to ask these questions.”
As chairman and CEO of Facebook, Zuckerberg wields an unusual amount of control over the company. He owns a controlling number of voting shares over the stock, which gives other investors no real say over the company’s governance. It’s unlikely Zuckerberg will step away from either role anytime soon, but the Cambridge Analytica scandal is a good chance for activist investors to call for changes.
In an interview with Vox on Monday about Facebook’s role in society, Zuckerberg said his personal control of the firm was actually good for users in the long term (emphasis ours):
“We’re continually thinking through this. As the internet gets to a broader scale and some of these services reach a bigger scale than anything has before, we’re constantly confronted with new challenges. I try to judge our success not by, ‘Are there no problems that come up?’ But, ‘When an issue comes up, can we deal with it responsively and make sure that we can address it so that those kinds of issues don’t come up again in the future?
“You mentioned our governance. One of the things that I feel really lucky we have is this company structure where, at the end of the day, it’s a controlled company. We are not at the whims of short-term shareholders. We can really design these products and decisions with what is going to be in the best interest of the community over time.”
The data-privacy scandal, in which the consulting firm Cambridge Analytica improperly scraped 50 million Facebook user profiles, has wiped about $US86 billion off Facebook’s market cap since the news broke in March.