Shareholder Proposal Filed in Wake of Falling Stock, User Exodus Seeks Report on Strategies for Protecting Against Abusive Content
BOSTON AND NEW YORK (October 30, 2018) – With Facebook stock suffering losses and millions of users abandoning the platform over content and privacy controversies, Arjuna Capital and New York State Comptroller Thomas P. DiNapoli as Trustee of the New York State Common Retirement Fund (Fund) have filed a shareholder proposal requesting that Facebook publish a report on its policies for governing content and explain what it is doing to address content that threatens democracy, human rights, and freedom of expression. The shareholder request is expected to be subject to a vote of fellow investors at the company’s annual meeting in the spring of 2019.
Concerned investors have warned for some time that the controversies surrounding Facebook’s content management pose significant threats to its long-term value.
Natasha Lamb, managing partner at Arjuna Capital and lead-filer of the proposal, said: “Facebook owes investors a full accounting of its response to this global crisis of confidence. In the aftermath of record-breaking market losses, we are hopeful Facebook will finally address how it will responsibly govern the platform. The reputational, regulatory, and financial risks posed by content governance controversies must be examined, not to mention impacts on human rights, democracy, and freedom of expression.”
New York State Comptroller Thomas P. DiNapoli said: “Investors need to know what Facebook is doing to protect its users and its platform. Facebook’s failure to offer convincing evidence that it can protect users from abusive content has harmed its value. The company is at a crossroads and an honest assessment of its ability to safeguard its platform, and those who use it, is necessary if it hopes to move forward and grow its long-term value.”
The Arjuna Capital and Common Retirement Fund shareholder proposal cites investor concerns over the use of Facebook’s platforms for misinformation campaigns, political hacking and attacks on U.S. elections, and its role in propagating hate speech in the midst of ethnic conflict in Myanmar. The proposal comes after Facebook suffered stock value drops of more than $100 billion this year, first in March following news that Cambridge Analytica misappropriated millions of users’ data and then in July after its quarterly earnings report reflected increasing costs and decreasing revenue growth.
Michael Connor, Executive Director of Open MIC, a non-profit that works to encourage shareholder engagement in the media and tech sectors, said: “If Facebook has a comprehensive plan to deal with the many problems on its platform – and that’s a big ‘IF’ – the company needs to share that plan with investors and other key stakeholders. It’s time for Facebook to get real and explain how it plans to address some very fundamental long-term issues.”
In 2018, abuse and misinformation campaigns remain common on Facebook. Notable recent examples include: 652 fake accounts discovered in August spreading misinformation; censorship of valid users organizing against white supremacy; an ACLU lawsuit alleging Memphis police used fake accounts to spy on Black Lives Matter activists; and recent reporting on Facebook’s inconsistent deterrence of hate speech, and racist or sexist language, among others referenced in the new shareholder proposal.
Lamb said: “It’s increasingly clear that fairly drastic steps are needed if Facebook is going to survive the mass exodus among younger users and millennials, who appear to be leaving in droves. Pew Research recently found 44 percent of young Americans have deleted Facebook, and 74 percent of users have either deleted the app, taken a break, or adjusted privacy settings.”
A similar proposal co-filed by Arjuna and the Fund last year saw significantly increased investor support. That proposal was also filed with Twitter and Alphabet, Inc. (Google).
The full text of Arjuna and the Fund’s Facebook Content Governance shareholder proposal is available at: https://arjuna-capital.com/wp-content/uploads/2018/10/2018-10-29-Arjuna-Capital-Facebook-resolution.pdf.
MEDIA CONTACTS: Arjuna Capital: Patrick Mitchell, (703) 276-3266 or [email protected]
Office of the New York State Comptroller: Matt Sweeney, (212) 383-1388 or [email protected]
Arjuna Capital is an investment firm focusing on sustainable and impact investing. In recent years, Natasha Lamb and Arjuna Capital have been recognized for an ongoing investor campaign to promote gender pay equity in the tech, banking, and retail sectors. In December Lamb was named to the “Bloomberg 50” list of influencers who defined global business in 2017. For more information, visit www.Arjuna-Capital.com.
The New York State Common Retirement Fund is the third largest public pension fund in the United States with estimated assets of $207.4 billion as of March 31, 2018. The Fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. The Fund has consistently been ranked as one of the best managed and best funded plans in the nation.