In the wake of several scandals that rattled Facebook’s stock, the Illinois state treasurer is calling for the social media giant to divide CEO and chairman Mark Zuckerberg's position into two separate roles and democratize the company’s shareholder voting.
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“We believe Facebook has good fundamentals,” Mike Frerichs said during an interview with FOX Business’ Neil Cavuto on Thursday. “But we believe they can perform better.”
To do so, Frerichs said the company should separate the roles of the CEO and chairman of the board positions to ensure the board of directors is entirely independent. That separation doesn’t mean Zuckerberg should leave the company, he said: The CEO should have a role at the company, but not in his current capacity.
Facebook -- which faced intense criticism after it was revealed in March the company had inadvertently allowed the British consulting firm Cambridge Analytica to gather the data of 87 million users to reportedly influence the 2016 presidential election -- came under fire again after its new algorithm accidentally classified the Declaration of Independence as hate speech.
“We think they might have been able to avoid some of the scandals, or some of the bad news they’ve received over the past year and a half,” Frerichs said.
Critics, however, say the Illinois state treasurer’s office -- which has a $37 million ownership stake in Facebook -- is looking out for its own interests. Frerichs dismissed that claim, and said they wanted to maximize the returns on behalf of the “hundreds and thousands of families that are saving for their kids’ college education.”
“Facebook has been a good investment for these families,” he said. “But what you’ve seen in light of the privacy issues, and other scandals, you see people decreasing their time on the platform. With that, that’s going to mean decreased ad revenue. And that’s going to mean depressing their share price.”