Describing the risks posed by Meta’s products as “apparent and serious”, some of the company’s shareholders are asking the tech giant to hire an outside, independent law firm to assess the board’s risk and audit committee. of administration of the company.
In a proxy statement filed April 8, Meta opposed the shareholder proposal, noting that the board already conducts an annual self-assessment of the performance of its directors and committees.
The shareholders who filed the proposal do not have a law firm in mind, Melanie Sloan, a spokeswoman for the group, said on Tuesday. She said shareholders were excluding all law firms that were already advising Meta.
“We are proposing that the firm be fully independent…so the outcome is not assured, as is much more likely with the self-assessment the board is doing now,” she said.
On Tuesday, a group of shareholders publicly filed a letter to shareholders of John Harrington, Chairman of Harrington Investments Inc., urging them to vote for the independent review at Meta’s annual shareholders’ meeting on May 25. Shareholders of the Park Foundation and Sum of Us co-filed the letter.
In his filing, Harrington noted that no Meta board committee oversaw the company’s risk until 2018, when Facebook allowed the personal data of millions of users to be taken without their consent in the process. Cambridge Analytica scandal.
That year, the Park Foundation and another shareholder, Trillium Asset Management, submitted a shareholder proposal to create a risk committee, arguing that the tech giant’s scale and technological advances “challenged the company’s ability to fully understand its impact on society”. Facebook, the name of the company before it adopted the Meta moniker late last year, opposed the proposal, which won the approval of 45% of shareholders, which does not is not enough to be adopted.
After the vote, Facebook expanded the scope of its existing audit committee to its current form of risk and audit committee.
“Over the next four years, the risks posed by Facebook’s products have become increasingly apparent and serious,” wrote Harrington, a socially responsible investing advocate. “We learned that the company often fails to meet its commitment to remove harmful content, such as advertisements for alcohol and weight loss drugs aimed at minors as young as 13, depictions of animal cruelty and misinformation regarding COVID-19 and the 2020 election.
“The company has allowed militias advocating violence to proliferate on the site, and a whistleblower revealed that Facebook’s own internal studies find that 32% of girls who suffer from poor self-image feel worse after spending time on the company’s Instagram platform.
Harrington cited litigation against the company as another risk, and he pointed to reports from the New York Times that whistleblowers have filed at least nine complaints with the U.S. Securities and Exchange Commission, claiming that Facebook has provided too optimistic a picture of the company to mislead investors.
“In the context of near-constant scandal and growing challenges to its revenue model, Meta’s failures to meet modern standards of corporate governance are unacceptable,” Harrington said.
An independent review, he added, “should determine whether the board is properly instilling a culture of risk oversight and accountability, the extent to which the board seeks to mitigate risk, and what actions could be taken – including including training – to appropriately assess social impacts and risks.”
In its proxy statement, Meta said the company in February expanded the remit of its risk and audit committee to include oversight of the company’s environmental sustainability and social responsibility, including “ongoing monitoring the safety and security of our community”.
The company also receives reports from management on safety, security, human rights, and civil rights concerns, and employees can confidentially submit concerns to the committee regarding “accounting matters.” or questionable auditing,” the proxy statement reads.
Asked for further comment, a Meta spokesperson pointed to the proxy statement.