by Elton Gomes
Facebook’s troubles just got bigger. Four major US public funds that hold shares in the social media company proposed that CEO Mark Zuckerberg should step down as chairman after several high-profile scandals. They also said that they hope to gain backing from larger asset managers.
State treasurers from Illinois, Rhode Island, and Pennsylvania, along with New York City Comptroller Scott Stringer co-filed the proposal. Rhode Island State Treasurer Seth Magaziner said that the proposal was worth filing as it is a way of drawing attention to Facebook’s problems and how to solve them.
This will allow us to force a conversation at the annual meeting, and from now until then in the court of public opinion, Magaziner told Reuters in a telephone interview.
A Facebook spokesperson declined to comment on the matter. It remains to be seen how effective the current proposal will be, particularly since Zuckerberg might have immunity from shareholder pressures. However, it is not the first time that Zuckerberg has been called to stepped down.
Investor groups call for Zuckerberg to resign
After the Cambridge Analytica scandal shredded Facebook’s reputation to pieces, a powerful activist investor group called for Zuckerberg’s resignation.
Mark Zuckerbergs prepared testimony highlights a simple fact: He doesnt understand how a large, global and publicly-held company is run, Open MIC CEO Michael Connor said in a statement. He currently has two jobs at Facebook CEO and Chairman of the Board. Its time for him to give up at least one, if not both, titles, the Verge reported.
Although Open MIC does not hold any shares in Facebook, it has a history of coordinating with Facebook investors to call for more responsible behavior from the company.
Facebook’s recent woes
Facebook was recently in the headlines after it announced that a security breach exposed data from 50 million accounts. The security breach came as Facebook was already facing scrutiny as to how it handles user data. The breach was Facebook’s largest in its 14-year history.
Facebook recently concluded that spammers caused the security breach. The Irish Data Protection Commission, Europe’s leading privacy watchdog, imposed a fine of $1.63 billion on Facebook.
We are concerned at the fact that this breach was discovered on Tuesday (last week) and affects many millions of user accounts but Facebook is unable to clarify the nature of the breach and the risk for users at this point, the regulator was quoted as saying by IANS.
Zuckerberg’s increasingly intrusive role in Instagram and WhatsApp, both Facebook entities, was questioned after their founders quit Facebook. Instagram’s founders Kevin Systrom and Mike Krieger reportedly quit over Zuckerberg’s increased involvement. WhatsApp co-founder Jan Koum stepped down due to privacy disagreements with Zuckerberg. There were also reports of Zuckerberg trying to leverage Instagram to possibly attract more users to Facebook.
In addition to all this, Facebook is being probed for its alleged role in the 2016 US presidential elections. The social media company also came under fire for inciting anti-Muslim violence in Sri Lanka, while it was criticised for doing very little to curb hate speech in Myanmar.
Is it time for Zuckerberg to step down?
Facebook has continuously failed at expanding, other than implementing a handful of core features. Its usefulness has been doubted, and people are quitting the network in huge numbers. Besides, there have been several calls to regulate Facebook in the context of safeguarding online data.
Writing for TechCrunch, Devin Coldewey says that Facebook seems to be witnessing a crisis of confidence at multiple levels. Coldewey says, “Now is the time for Mark Zuckerberg to spare himself the infamy and resign for Facebooks sake and his own.”
Elton Gomes is a staff writer at Qrius