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(4/10) Make Facebook (the Company) look less like 1950s Mad Men

Stephen Collins

October 26, 2017   4 mins

This is the fourth of ten themes in Nigel Cameron’s open letter to Mark Zuckerberg, exploring obstacles to him seeking the US presidency. Click here for whole series. 

There are two big issues here.

First, diversity. I know, this is a problem with other Valley companies. But why isn’t Facebook as diverse as America? Why do so many Silicon Valley companies look more like the Mad Men ad agency world of the 1950s than workplaces of the 21st century?

While there can be genuine problems in recruiting diverse talent in a field like engineering where most applicants may be male, what about the top? Eight pictures come up when you put your board of directors in a search engine. There’s Sheryl Sandberg, your Chief Operating Officer and then there’s Susan Desmond-Hellman of the Gates Foundation, the sole female independent director. Then there are six white guys. No other women. No black or Asian or Hispanic directors. This looks odd enough in the context of the America of 2017 – and to a growing number of people it looks deeply offensive. But given your two billion users span the globe, it looks bizarre and is bizarre.

Here are some quick ideas:

  • The board of directors issue can be sorted out pretty quickly, as you don’t just run the company, you control it. Sit down with yourself one evening and think up a dream-team board that brings in some of the extraordinary, proven leaders who represent the global community you serve. Start, perhaps, with India where there are more individual Facebook users than in America – it is, as you may have noticed, a country with quite a tech-savvy population.
  • It’s harder further down the company, especially among engineers. But you’re good at the hard stuff. Why not ‘move fast and break some things’ to turn this situation around? Set the company the challenge of becoming America’s most diverse new-technology organisation. Be the major source of initiatives, scholarships, internships, prizes, for women and minorities in every area where you have found them hard to recruit. But please, please, begin with the board.
  • Then reflect on what amazing value all this fresh, and fresh-thinking, talent will bring to the next round of Facebook’s global development.

The second part of this question focuses on Facebook the corporation. Why is the world’s top “social” company run on oil-baron principles?

The corporate structure of Facebook is as old-economy as you can get. Like Rupert Murdoch’s media empire1 there are two “share classes.” It sounds a technical issue, but it’s actually very simple. What it means is that even though you don’t actually own more than half the company you personally control it with a majority of the voting shares. (When Facebook went public, you owned 22%, but ended up with 57% of the voting shares.) Many people see this as a thoroughly bad business practice as it drives a wedge between investors and decisions about their money, which can be a big enough challenge in a standard corporate structure where share value is reflected in voting power. It’s also illegal in some other parts of the world, such as the Hong Kong stock exchange2


Of course, like many iffy practices, it doesn’t defy the principles of the market. When Facebook went public investors knew what they were letting themselves in for. The market priced Zuckerberg’s control of the super-shares into the valuation. They reckoned they could live with it, and would have to if they wanted a piece of the action.

But the oil-baron corporate structure highlights something even bigger: the world’s leading “social” company is just about the world’s least participatory. It’s as top-down as they come.

There was a famous example of this a few years back when you decided to change Facebook’s privacy rules. There was a system in place from the early days that gave power to users by actually letting them vote on such changes. People organised to defeat a proposal using this system. As a result, the system was scrapped3.

Of course, there’s a silver lining: you’re the boss, and pretty much every one of the changes we’re suggesting to boost your chances on the ballot could be implemented in a memo from your desk.

So tell your lawyers to work on a re-structuring option that will bring investment into line with shareholder control – with only one class of shares.

Then begin an aggressive programme of user participation in decision-making. For example: what about reviving the idea that users should shape privacy policy, though in much more detail than before? You could start by giving us all half a dozen basic privacy models for the company, and take an informed vote of users – supervised by a body like the League of Women Voters4 That is separate from the need to offer users more and better personal privacy choices. And more control over the feed we see. Users could be given a big say in all of these.

I’m not suggesting you re-structure as a non-profit (though that wouldn’t be the worst idea). Maybe better, mutualisation – like a credit union or (the UK term) building society – where all the users are the shareholders: that would certainly best fit the “social” idea.

And why not add to your board two or three distinguished public figures as thoroughly independent directors, both to represent users (who could elect them) and to act as the conscience of the company? Both in its external commitments: to such causes as fighting poverty, supporting journalism, and addressing the mental health challenges of social media. And internally: protecting children, and preventing the use of Facebook by criminals and terrorists and foreign powers.  What about people like President Jimmy Carter, physician and commentator Charles Krauthammer, former Irish President Mary Robinson, and social science researcher Sherry Turkle?

Part 5: Put free speech before profiting in China, Russia and other censorious regimes

  1.  Myles Udland, Business Insider, April 27, 2016. “Facebook has a new class structure and Mark Zuckerberg is still in control.” “This is not a traditional governance model.” And on Murdoch and others: Cynthia Littleton, in Variety for March 25, 2015: “Control Issues: How Media Moguls Keep a Tight Grip on Their Empires.”
  2.  Matt Orsagh, CFA Institute for April 1, 2014. “Dual-Class Shares: From Google to Alibaba, Is It a Troubling Trend for Investors?”
  3.  Josh Constine in TechCrunch, 1 June, 2012. “Facebook Forced By Privacy Activist To Put Policy Changes Up For Worldwide Vote Until June 8th.”
  4.  The League of Women Voters is a widely respect non-partisan organisation that has been responsible for sponsoring some of the US Presidential Debates. In the UK, the Electoral Reform Society might play such a role.

Nigel Cameron writes about technology, society, and the future. In 2007 he founded the Washington think tank The Center for Policy on Emerging Technologies. His most recent book is Will Robots Take Your Job?


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