Facebook (FB) needs to clean up its corporate governance act if it wants to rebuild trust with users and the government.
“I think Facebook needs to install good governance procedures. When you have a founder like Mark Zuckerberg —who is a wonderful guy, nice guy and everything — but he has so much control that they don’t really have good governance at Facebook. The board isn’t going to override Mark,” JetBlue Chairman Joel Peterson told Yahoo Finance when asked what embattled Facebook needs to do to repair its image.
Peterson is also a well regarded business relationship expert and long-time Stanford professor. And he is right about Zuckerberg unlikely going anywhere anytime soon.
Besides having an outsized presence on the Facebook board, Zuckerberg has the necessary voting power through his dual class structure to control all decisions being made.
“I think you really need to say what are the good governance principles, let’s get those set in this company so it’s not an autocratic rule and that way we can restore trust,” says Peterson.
Facebook’s image has caught a beating for the better part of two years, mostly its own doing.
Zuckerberg’s creation has had to deal with rising concern among regulators that it has too much power in the social media sphere. Hence, ever-rising calls down in DC for Facebook to be broken up.
And of course there are two other 1,000-pound gorillas in the room: 1) How Facebook handles the 2020 presidential election after the 2016 Russian meddling debacle?; and 2) Can Facebook get a handle on hateful content on its ever expansive platform?
If there is any consolation here — for Facebook investors that is — it’s that the stock has outperformed the Nasdaq Composite by about eight times over the past year during the height of the controversy. For the most part, Facebook’s financials have stayed rather impressive despite investments in people and tech to police its platform.