Turbulent Facebook Annual General Meeting after data scandal

facebook annual meeting 2018The aftermath of the Facebook data scandal has led to a more turbulent general meeting of the world’s largest online network this year.

A woman had to leave the hall because she demanded in interjections, founder and boss Mark Zuckerberg to refuse re-election to the Board.
Another shareholder called for the elimination of the more-voting shares that would secure Zuckerberg’s control of the company. With the current power situation threatens Facebook , to become an “entrepreneurial dictatorship”, he warned on Thursday.

There was also direct criticism of the outflow of information from millions of Facebook users to Cambridge Analytica, which had triggered the current data scandal. A representative of investor NorthStar Asset Management said it violated human rights. She argued that the data scandal had only become possible because the CEO could put together a board of directors to his liking. Boards of directors in US companies have even more far-reaching powers than the German supervisory boards and also determine the strategy in addition to the usual control functions.

Shareholders were also concerned that more and more controversy over Facebook could scare off users and ruin the online network’s business. Among other things, they called for the establishment of a risk assessment body, as well as more detailed reports on tax payments in individual countries and about the gap in pay for men and women. The proposals were rejected – not surprisingly, because Zuckerberg controls the majority of voting rights.

More voting shares have been introduced in many technology companies to ensure the continued influence of the founders. For example, in the Google umbrella group alphabet they give the two co-founders Larry Page and Sergey Brin massive influence in important decisions.

The system is repeatedly criticized because it can deprive the founders of control. Most recently, the collapse of the blood test startup Theranos caused a sensation in which founder Elizabeth Holmes allegedly fooled investors and regulators for years. At the game company Zynga (“Farmville”), founder Mark Pincus exchanged his shares with additional voting rights in early May into conventional shares – and thus lost control. That was in the interest of all shareholders, he argued.

Zuckerberg repeated many points from the US Congress and European Parliament hearings when he appeared at the AGM. Among other things, he acknowledged that Facebook has not understood his responsibilities sufficiently and that now changes.

At the same time, Top Operating Manager Sheryl Sandberg, responsible for operations, announced that Facebook would consider more under-represented groups such as women or people of a different skin color than Weiss in the future composition of the board. Leading positions in Silicon Valley are often a domain of white men.

MENLO PARK (awp international)

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