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Facebook shareholders call for independent chairman, shares continue descent

Mark Zuckerberg, Facebook

2018 has not been the best year for Facebook. The company, which usually has a very strong presence on the Wall Street, has been running into trouble on and off. And with stock hitting its lowest level since April 2017 on Friday, things are not looking to turn around.

On Friday, Facebook shares marked a decline of 3 percent and reached $139.53. Zuckerberg’s own personal fortunes have dropped over $31 Billion from their peak. This year alone, the Facebook founder has lost $17 Billion and has slipped from the 3rd position on the world’s richest list, to the sixth. Of course, he is still very rich with somewhere around $55 Billion on him.

Meanwhile, shareholders have begun calling for an independent, external chair of the board for the company. As per survey cited by Bloomberg, Facebook was among the United State’s least trusted institutions, with only the Congress below it. And multiple individual stakeholders as well as venture firms that hold significant stakes in the firm, have started rallying support to their cause.

As per Michael Wolf, CEO of Activate:

Facebook has big challenges ahead of it. And I am not sure they are able to get a handle on the vibes of the 2 Billion people using the platform.

Jonas Kron of the Trillium Asset Management Company told Bloomberg:

The board directors put out a statement indicating their support for Sherryl and MArk Zuckerberg, But the chair of the board is Mark Zuckerberg. So that’s basically Mark Zuckerberg saying that he supports Mark Zuckerberg.

This is not the first time that shareholders have come up with demands for an independent shareholder. Last year, a section of stockholders had stated that an independent chair of board could help the company run better. Zuckerberg of course, does not agree. While agreeing that his company faces challenges, he has time and again stated that the leadership at the social media firm is well up to the task.

This is not the first time that shareholders have called upon Facebook to insinuate changes within the internal hierarchy. However, Zuckerberg’s dominance within the company (which stems in a large part from his significant stakes) have been enough to keep large changes from going through.

Lawmakers are also not very happy with how things have been happening. In a statement, Rep. Denny Heck, member of the House Intelligence Committee said:

If they don’t step up much more aggressively, I can confidently say that we on the policy-making side will have to get involved.

Facebook is not the only company that has been facing ire over too much leadership control. Recently, the SEC used Elon Musk’s tweet about taking Tesla private, to depose him from the chairmanship of the board of directors, and pave the path for an external leader. With that said, Zuckerberg is known to be fiercely protective of the control he wields at Facebook, and is not likely to yield an inch without a fight.

A bibliophile and a business enthusiast.

mudit.m@thetechportal.in


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