Visible Hands: Losing Face 💻💬
Facebook’s annual shareholder meeting is May 27 (next Wednesday!)
Facebook, proud owner of Instagram, WhatsApp, Giphy, and way too much of your personal data, is constantly in the news.
Some recent headlines:
In its biannual Community Standards Enforcement Report update last week, Facebook noted a 68% increase in hate speech in Q12020 versus Q42019 (to 9.6 million pieces of hate speech)...
Zuck recently said that Facebook’s content moderation efforts have been hindered by the coronavirus keeping non full-time moderators home. Facebook marked legitimate COVID articles as spam, which Alex Stamos (former chief security officer) chalked up to the lack of human oversight...
Facebook just had to pay $52 million in a settlement with content moderators who developed PTSD on the job (some moderators earn as little as $28,800 in salary)...
Last month Washington state sued Facebook for accepting PAC money for ads that don’t comply with the state’s campaign finance disclosure laws. This is after a $238,000 settlement with Washington in 2018 to resolve another political advertising dispute...
Facebook started a controversial, pricey “oversight board” to deal with tricky content issues...
And, to top it all off, Facebook just set up a pro-tech advocacy group, American Edge, to fund ad campaigns and research in favor of its industry.
With all that going on, we wanted to highlight some proposals up for a vote at next week’s shareholder meeting.
Harrington Investments has proposed a resolution on Facebook’s lack of fact checking for political ads. Currently, Facebook exempts political advertisements and posts from its fact-checking rules. Harrington asks for “increased transparency to assess the operational, reputational, and social license implications of Facebook’s current policy, as well as the board’s assessment of the concerns regarding the potential impact of those policies on democracy, public discourse, and civil and human rights.”
Arjuna Capital has a resolution that mandates at least one future Board candidate to have “a high level of human and/or civil rights expertise and experience and is widely recognized as such.”
The Nathan Cummings Foundation’s resolution calls for “holistic infrastructure to facilitate long-term attention to civil rights concerns at the company and asks the Board to evaluate its ability to manage civil and human risks overall.”
We interviewed Susan Ozawa Perez of Harrington Investments on their resolution. First off, this issue imposes significant business risks for investors: Zuckerberg stated on their October 2019 earnings call that “from a business perspective, the controversy this creates far outweighs the very small percent of our business that these political ads make up”. But also, Susan noted, “there are obvious public policy issues involved in propagating misinformation to an electorate for profit, and significant public policy issues can be raised with shareholder resolutions to the attention of the Board.”
Despite these hopeful shareholder efforts, there’s reason to be nervous. The Securities and Exchange Commission (SEC) proposed new rules that could block smaller investors (like those above) from pushing future resolutions. Investors Against Genocide, a 501(c)(3), denounced this potential change: “Our experience is that proposals are one of a very few options available to get attention from companies and encourage them to engage.” Yet, the big asset managers, Fidelity, Vanguard, and BlackRock (in a vaguely worded letter...ahem, Larry Fink), seem to support the SEC.
As a consumer:
Facebook has an Ad Library, which is supposed to provide transparency around political advertising. Although it fails to name the person paying for the ads or their precise cost (an alleged violation of the aforementioned Washington law), check out the link for tidbits like this.
Research has shown that American students are unprepared to analyze the credibility of information on the Internet. Here are some tips on how to spot fake news. Think before sharing. Don’t friend strangers. Report content that looks suspicious.
As an investor:
Although Zuckerberg and insiders own the majority of voting shares (FB is a dual class stock), making your voice heard can send a message. According to Susan, “Retail Facebook investors can, first, vote their proxies and vote yes on the suite of resolutions at Facebook related to due-diligence on civil rights and human rights implications of Facebook’s actions. They can also have a conversation with their financial advisor or 401(k) manager about socially responsible investment options available to them and ways they can make sure their proxies are being voted according to their values.”
Bonus: Check out other resolutions proposed by Harrington Investments.
As an employee:
Harrington Investments’ resolution came after last fall’s public employee letter against Facebook’s political ad policy. The open letter made a difference!
As a citizen (suggestions courtesy of Susan!):
The number of female CEOs in the Fortune 500 hits an all-time record. “...even with a record 37 female CEOs, women run just 7.4% of the 500 businesses on the ranking. (For perspective: Twenty years ago, women ran two.)”
AFL-CIO sues OSHA to demand standard for worker protections. “Millions are infected and nearly 90,000 have died, so it’s beyond urgent that action is taken to protect workers who risk our lives daily to respond to this public health emergency. If the Trump administration refuses to act, we must compel them to.”
BlackRock accused of climate change hypocrisy. “...campaigners argued the asset manager was paying lip service to tackling climate change after it voted against resolutions calling for Woodside Energy and Santos to set targets in line with the Paris agreement, which aims to limit global temperature rises, and to disclose their lobbying.”
Vaccine experts say Moderna didn’t produce data critical to assessing Covid-19 vaccine. “When a company like Moderna with such incredibly vast resources says they have generated SARS-2 neutralizing antibodies in a human trial, I would really like to see numbers from whatever assay they are using...It doesn’t publish on its work in scientific journals. What is known has been disclosed through press releases. That’s not enough to generate confidence within the scientific community.”
Whistleblower: Wall Street has engaged in widespread manipulation of mortgage funds. “Many properties may have borrowed more than they could afford to pay back — even before the pandemic rocked their businesses — making a CMBS [commercial mortgage-backed securities] crash both more likely and more damaging.”
How private equity is ruining American health care. “You can’t serve two masters. You can’t serve patients and investors.”
🎓 Graduating students: don’t forget to subscribe with your personal email before you lose access to your university inboxes! And of course, congratulations on your next chapter!
Not scared off from social media? Stay connected via our slowly growing Instagram, Twitter, Medium, and, of course, email (firstname.lastname@example.org)! Please invite any friends, roommates, coworkers, armchair activists, and Instagram influencers to join the movement. See ya next Thursday!