June 6, 2018 // Boston, MA – At last week’s annual meeting, Facebook (NASDAQ: FB) shareholders sent a strong message to management when Trillium Asset Management’s risk oversight committee shareholder proposal received a 45% vote of non-insiders. This means 45% of the total votes cast, after excluding the votes of 14 insiders that are executive officers and directors, were in favor of our proposal.
Investor demand for greater oversight and accountability has steadily mounted as the frequency and string of controversies has sparked extensive criticism and concern. The shareholder proposal asked Facebook to establish a Risk Oversight Committee at the Board level. Establishing such a committee would build in governance systems and processes that provide the most robust and effective “big picture” risk oversight – a level of oversight commensurate with the novelty and importance of its impact.
As Trillium Partner Will Lana told Mark Zuckerberg and other shareholders at the annual meeting, ‘ We’ve identified 15 distinct controversies confronting Facebook. The list is long and the list is serious. Facebook’s decision to piggy back risk oversight onto the audit committee hurts its ability to manage big picture risk. We must ask ourselves, if the audit committee does have the capacity to manage risk properly then why is the list of controversies so long and so serious? ‘
It’s apparent to everyone that 2018 is a pivotal year for Facebook,” said Trillium Senior Vice President Jonas Kron. “And the drip-drip of bad news continued this week as we see reports that Facebook infringed on user privacy by sharing user data with device makers, including Chinese firm Huawei. Considerable money and resources have been diverted to address this ongoing litany of problems and its time for some proactive governance measures to set Facebook on a better path.”
During a moment of heightened awareness concerning cyber-security and data privacy, the proposal represents an important corporate governance reform that would enhance big picture risk oversight mechanisms while helping protect shareholder value. The outcome of this proposal demonstrates that these concerns are shared by a wide range of investors. We will continue to urge Facebook to take the next steps to strengthen its governance structure.
For more information: Caroline White, Communications Manager, Trillium Asset Management, 617-532-6680, cwhite[at]trilliuminvest.com.
Trillium Asset Management is the oldest independent investment advisor devoted exclusively to sustainable and responsible investing. With over $2.6 billion in assets under management, Trillium has been managing equity and fixed income investments for high net worth individuals, foundations, endowments, religious institutions, and other nonprofits since 1982. A leader in shareholder advocacy and public policy work, Trillium’s goal is to deliver both impact and performance to its investors.
Important Disclosure: The information provided is not a recommendation to buy or sell the securities mentioned. The securities were selected on an objective basis for illustrative purposes and do not represent all of the securities purchased, sold or recommended. It should not be assumed that investments in the securities have been or will be profitable. The securities do not represent all of the securities purchased, sold or recommended for advisory clients.