Kenneth Chenault, the former CEO of American Express, made headlines in January when he joined Facebook’s then-all white, mostly-male board of directors as the social media giant tried to fix its tarnished image and battered brand.
At the time, Facebook CEO and Chairman Mark Zuckerberg said he had been trying to recruit Chenault for years, and that Facebook could learn a lot from Chenault’s customer service expertise and experience in building a trusted brand.
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Almost a year later, Facebook hasn’t solved its data breach problems and the accusations haven’t gone away that the social network is a platform for political propaganda.
Facebook is under pressure from several high-profile, independent shareholders to break up Zuckerberg’s dual role as Facebook CEO and chairman.
Chenault has been the topic of intense media speculation that he is slated to replace Zuckerberg as chairman, which would make him its first independent chairman.
This speculation was triggered in part by timing, Business Insider reported. Chenault stepped down from board positions at IBM and Procter & Gamble on Thursday, but is staying on as director at Facebook.
Initially, Facebook would not comment, doing little to end the speculation that Chenault will become the firm’s first independent chairman, but later, the company denied the rumors.
A spokeswoman told reporters: “Ken will continue to serve on our board in the same capacity.”
Facebook spokeswoman now confirms there's no change to Ken Chenault's role on the board.
— Deepa Seetharaman (@dseetharaman) December 28, 2018
Facebook shareholders who control $3 billion of Facebook stock have asked the Facebook board to make the role of chairman an independent position.
These include state and city treasurers from Illinois, Rhode Island and Pennsylvania, which joined the New York City Pension Funds and Trillium Asset Management in making the request, according to the Independent.
An Oct. 17 shareholder proposal, filed by Trillium Asset Management, said making the role of board chair an independent position “is best governance practice that will be in the interest of shareholders, employees, users, and our democracy.”
The shareholder proposal spelled out the controversies that Facebook missed or mishandled:
When Chenault joined the Facebook board on Feb. 5, 2018, its members included Zuckerberg; Marc L. Andreessen of Andreessen Horowitz; Erskine B. Bowles, president emeritus of the University of North Carolina; Susan D. Desmond-Hellmann, CEO of the Bill and Melinda Gates Foundation; Reed Hastings, chairman and CEO of Netflix; Jan Koum, founder and CEO of WhatsApp; Sheryl Sandberg, chief operating officer of Facebook; and Peter A. Thiel of the Founders Fund.
After facing heat over Russian ads, Sandberg told the Congressional Black Caucus in Ocotber 2017 that Facebook would add an African American to its board.
Chenault is one of the longest-serving black CEOs of a major U.S. corporation and a veteran in a field long dominated by white men in top management. He retire as chairman and CEO of American Express on Feb. 1 after 16 years. He was the first Black director on Facebook’s all-white board.
Despite much-publicized efforts to diversify its staff, Facebook’s lack of diversity persists. Diversity data show things are not moving much in the company’s workforce.
The NAACP civil rights organization asked social media followers, supporters and partners to join a weeklong #LogOutFacebook campaign starting on Dec. 18 in a digital protest against the tech company for its history of data hacks that unfairly target African Americans.
A recent Facebook post written by former manager Mark S. Luckie that criticized the company for its “Black people problem” was temporarily taken down, preventing it from being viewed publicly, after it was flagged for violating Facebook’s community standards.
Facebook’s governance structure puts investors at risk, shareholders wrote. Facebook should be like other major tech firms –Google, Microsoft and Apple — and have separate CEO and chairperson roles.
“Facebook plays an outsized role in our society and our economy. They have a social and financial responsibility to be transparent – that’s why we’re demanding independence and accountability in the company’s boardroom,” said New York City Comptroller Scott Stringer. “An independent board chair is essential to moving Facebook forward from this mess, and to reestablish trust with Americans and investors alike.”
The proposal will be put to a vote at the company’s annual shareholder meeting in May 2019, The Independent reported. “However it will be largely symbolic due to the control that Mr Zuckerberg has over the company’s board.” Zuckerberg owns a majority of voting rights to Facebook, which means he’s often labeled a dictator.
“Facebook has grown at an unbelievable pace. The capital structure has changed and it is time for its governance to catch up,” wrote Aeisha Mastagni, an investment officer for the California State Teachers’ Retirement System (CalSTRS), in The Financial Times.
