It has been more than three weeks since the New York Times and the Guardian-owned Observer published their stories about data analytics firm Cambridge Analytica’s surreptitious use of data from more than 50 million Facebook users during its work for President Trump’s campaign.
And, as CEO and founder Mark Zuckerberg continues his robotic media appearances and seemingly forced apologies ahead of back-to-back Congressional testimony later this month, some of the company’s largest investors are agitating for changes to be made not just to senior management, but to the board of directors that oversees Facebook.
Overnight, we pointed out that the European Commission is considering new regulations to stop social media companies from spreading “fake news”, something that Facebook has become a pariah for since the election, much to its leadership’s chagrin.
Then, adding insult to injury, on Monday afternoon New York City Comptroller Scott Stringer added his voice to the chorus of wary investors who are demanding changes be made to stop what one CNBC guest described as “the most profitable company of its size in the history of capitalism” from succumbing to regulatory crackdowns and user flight.
Though New York City’s pension fund – which has about $1 billion invested in Facebook stock – doesn’t have the clout to unilaterally push for change, Stringer said he’s pushing for a shakeup on the company’s board of directors. Specifically, Stringer wants Facebook CEO Mark Zuckerberg to relinquish his role as chairman, and hand the position over to an “independent” advisor.
“I think this is a wake-up call. This is a company that lost $50 billion after this scandal broke that’s not an insignificant amount of money even for Mark Zuckerberg – the value of the company has gone down and my job is to represent the firefighters, teachers, police officers, the people for whom we invest on their behalf. We think there needs to be more independent board oversight I think there needs to be an independent chairman of the board. I think we need more independent directors…and more directors who have experience in terms of data and ethics and all the things that these merging huge companies need in light of what happened.
Considering that Facebook is the eighth-largest company in the world and the self-styled guardian of the personal data belonging to 2 billion users, Stringer says it hasn’t comported itself in a way that makes people feel good… Though he quickly clarified that his fund has no intention of pulling out from Facebook stock, lest he accidentally trigger another vicious selloff.
Here is the NYC Comptroller explaining why he is calling for board changes at Facebook from CNBC.
“Clearly people’s data is being used without individuals’ permission and that’s going to hurt the brand,” Stringer said. “I understand this is a slow slog through this process but I am committed, as I have been in the past, to holding companies we invest in to the highest ethical standard. We have no intention of pulling out, but because we are investors we do have a right to ask these questions we want to look a regulator risk, revenue risk, the brand and also there’s a real discussion that should happen around our Democracy and elections.”
Stringer closed out the interview by speculating that he wouldn’t be the last major Facebook shareholder to raise these issues.
“When you start looking at what’s happening throughout the world…everybody who is a fiduciary of a pension fund that invests in Facebook has the absolute right to ask questions, to prod the board and to seek fundamental changes that will grow the company. We’re not trying to harm Facebook, we’re trying to make it a stronger company.”
However, judging by the contents of an interview published on Monday by Vox, Zuckerberg apparently has no intention of making any changes at the upper echelons of the company. In his mind, it seems, the problems raised by the Cambridge Analytica scandal have already been fixed.
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