Statement of Trillium Asset Management In Support of Item Number 6: Independent Board Chair May 30, 2019 at Facebook’s Annual Meeting
Good morning Mr. Chairman, members of the board, fellow shareholders. My name is Jonas Kron and I am here on behalf of Trillium Asset Management and the Park Foundation to hereby move Item Number 6, seeking an independent board chair policy for Facebook.
This proposal has been co-filed by the New York City Comptroller, the Treasurers of Illinois, Rhode Island, Connecticut, and Oregon, and a multitude of smaller and faith based investors.
At its core this shareholder proposal is about the risk of concentrating too much power in one person – any person.
As proxy advisory firm Glass Lewis put it in its report supporting this shareholder proposal – “vesting a single person with both executive and board leadership concentrates too much responsibility in a single person and inhibits independent board oversight of executives …”
Facebook is incredibly powerful – with wide ranging and difficult to understand, let alone control, social impacts. Over the last two years we have watched with growing dismay as that list of controversial and damaging social impacts grew very long. And as rigorous reporting from the New York Times has shown us, having a unified Chair and CEO severely limited the board’s ability to provide the company the oversight it needed.
It is these very facts about power and impact – responsibility and accountability – which highlight why a unified chair and CEO is such a misguided idea – it is unwise to have so much power concentrated in one person.
Which is why we should look to the examples of highly successful companies such as Alphabet, Apple, Autodesk, and Microsoft – to name just a few – which all have independent board chairs.
We recognize that Facebook has a lead independent director. And we acknowledge that the board has recently taken steps to articulate more clearly her powers and responsibilities. However, these recent changes are fundamentally insufficient to meet the task at hand because a lead independent director does not command the same authority as an independent board chair.
This question comes to shareholders at a critical moment. Facebook is embarking on a privacy pivot which leadership has described as requiring a completely new platform. At a time when there is little public trust in Facebook, it is navigating a regulatory landscape that is changing quickly. In this difficult and challenging environment it is important to stop and consider that the CEO position is the most demanding job in corporate America and the responsibilities of a Chairman of the Board are enormously time consuming. We need different people in these two distinctly different leadership positions.
Let us not miss this opportunity to make a simple, yet powerful change that would go a long way towards creating a successful future, not only for Facebook and its employees and its shareholders, but for individuals, families, and communities around the world.
Thank you for your time and attention – and for your support for an independent board chair.
Jonas Kron, Senior Vice President
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