2022 Facebook Shareholder Proposals
Background to the Campaign
A group of institutional investors and shareholders of Meta Platforms Inc. formerly known as Facebook ($FB), announced that they have filed a series of eight shareholder proposals for the company's 2022 proxy, calling out a variety of concerns about Meta Platforms' business that carry significant and material risk.
The proposals raise a host of environmental, social and governance (ESG) concerns at the nearly one trillion market cap company. Some of the issues addressed by the proposals include the potential psychological, civil, and human rights harms from its proposed Metaverse Platform, the spread of hate speech and misinformation on its social media platforms, the company’s dual-class share structure which effectively prevents shareholders from having a voice in company decision-making, and the need for an independent board chair to provide better oversight of Mark Zuckerberg, Meta’s CEO.
Read quotes from the investors involved:
Proposal: Independent Board Chair. Lead Proponent: Illinois State Treasurer's Office. Co-filers: Aviva Investors; Seventh Generation Interfaith Coalition for Responsible Investment; Sisters of the Holy Names of Jesus and Mary, U.S.-Ontario Province; Vermont Pension Investment Commission.
“Too much control given to one person is not a good model for any company and Meta (Facebook) has shown us over and over again the risk it carries for its users and investors,” said Illinois State Treasurer Michael Frerichs. “An independent board chair is an important step forward to provide real oversight over management, address governance failings, help restore trust in the company, and better protect shareholders’ interests. We hope the company will use this as an opportunity to take a decisive step toward building a more successful, sustainable company for the long-term.”
Proposal: Assessment of Metaverse User Risk and Advisory Shareholder Vote. Lead Proponent: Arjuna Capital. Co-filers: SHARE; Storebrand; SumOfUs.
“Facebook’s (Meta’s) transformation into the metaverse is not a fait accompli,” said Natasha Lamb, managing partner of Arjuna Capital, who has engaged with Facebook for the last 5 years. “In the face of anti-trust litigation, whistleblower testimony, congressional hearings, and abysmal governance practices, investors seriously question Zuckerberg’s ability to lead this transformation and whether Facebook has the social license to operate a potentially dangerous emerging technology. The same issues Facebook is reckoning with—discrimination, human and civil rights violations, incitement to violence, and privacy violations—will only be heightened in the metaverse. That’s why Investors need to understand the scope of these potential harms, and actually weigh in on whether or not this is a good idea before we throw good money after bad.”
"Investors are looking for assurance that in the next chapter of Facebook, responsible adult supervision is in place to avoid the cavalier treatment of civil and political rights we've seen over the past 15 years," said Sarah Couturier-Tanoh, Manager of Corporate Engagement & Advocacy at SHARE.
Proposal: Address Wealth Inequality through an Ownership Culture. Lead Proponent: Corporate Governance.
"Meta Platforms should address inequality and democracy by helping establish an ownership culture within the firm and in the larger society," said James McRitchie of Corporate Governance. "This proposal asks Meta Platforms to include a simple matrix, ideally using EEO-1 classifications, to report the stock ownership and associated voting power awarded to each tier of employees."
Proposal: Give Each Share an Equal Vote. Lead Proponent: Northstar Asset Management. Co-filers: New York State Common Retirement Fund; Rockefeller Capitol Management.
“When the stock is going up, no one wants to complain about the governance issues at Facebook, but the risks are always there,” explained Julie Goodridge, CEO of NorthStar. “The recent revelations due to the whistleblower Frances Haugen reaffirmed what we already knew – that no one can keep Zuckerberg accountable but himself. This structure is not good for the company or our society.”
Proposal: Human Rights Impact Assessment on Targeted Advertising Business Model. Lead Proponent. Mercy Investment Services. Co-filers: Missionary Oblates of Mary Immaculate-United States Province; NEI Investments
"Meta’s business model relies on a single source of revenue – advertising. That advertising relies on algorithmic systems that determine what users see, resulting in, and exacerbating, systemic discrimination and other human rights violations,” said Lydia Kuykendal of Mercy Investment Services. "As investors, we see a Human Rights Impact Assessment evaluating the company’s targeted advertising policies and practices as essential to identify and prevent such adverse human rights impacts that might expose the company to reputational, legal, business and financial risks.”
Proposal: Board Oversight of Harmful User-Generated Content. Lead Proponent: As You Sow (on Behalf of Thomas Van Dyck).
“Although Meta has created monitoring systems across 25 Community Standards, the platforms still continue to promote hate speech and disinformation with content that incites violence and harm to public health and personal safety,” said Andrew Behar, CEO of the non-profit group As You Sow. “Shareholders need to understand why these technological solutions continue to fail to protect civil society. This is a material risk to the company and shareholders.”
Proposal: Child Sexual Exploitation Online. Lead Proponent: Proxy Impact. Co-Filers: Adrian Dominican Sisters Porfolio Advisory Board; CommonSpirit Health; Congregation of St. Joseph; Dana Investment Advisors; Linda Wisnewski; Maryknoll Sisters; Providence St. Joseph Health; Proxy Impact (on behalf of Lisette Cooper); Stardust Fund.
"In 2020 there were over 21 million reported cases of online child sexual abuse material–94% of which stemmed from Facebook," said Michael Passoff of Proxy Impact. "Facebook’s rush for end-to-end encryption in Messenger and Instagram, in the name of protecting user privacy will provide child predators cover that will exponentially expand their outreach and the number of victims. If Facebook really wants to protect privacy, it can start by protecting the privacy of the most vulnerable – children."
Proposal: Review of Audit and Risk Committee. Lead Proponent: Harrington Investments. Co-Filers: Park Foundation.