Press Release: ARJUNA CAPITAL: SOCIAL MEDIA GIANTS ARE “FLYING BLIND” WITHOUT INDEPENDENT BOARD MEMBER WITH CIVIL/HUMAN RIGHTS EXPERIENCE

New round of resolutions filed at Facebook, Twitter and Alphabet/YouTube; White House/FCC Rule 230 Threats & 2020 ad boycott against Facebook seen as proof of need for action to mitigate risks to shareholders.

Boston, Massachusetts, October 21, 2020 –  In the wake of a widespread advertising boycott of Facebook and a mixed bag of steps across the social media giants to curb hate speech, racism, sexism, and violence, the investment management firm Arjuna Capital today announced that it will pursue 2021 shareholder resolutions at Facebook, Twitter and Alphabet (home of YouTube) seeking an independent board member with human rights and/or civil rights expertise.

The resolutions are sponsored by Arjuna Capital, which anticipates additional support from co-filers.  The Facebook resolution received 12% of nonmanagement support when it was considered on May 27th.  The Alphabet resolution garnered 25% of nonmanagement support when it was voted on June 3rd.  Both resolutions received sufficient support under SEC rules to be voted on for the second year.  The Twitter resolution is being offered to shareholders for the first time in 2021.

The shareholder resolutions ask the social media giants to nominate for the next Board election at least one candidate who has “a high level of human and/or civil rights expertise and experience and is widely recognized as such.”

Concerned shareholders not only object to the unconscionable hate speech posted on Facebook, Twitter, and YouTube (which is owned by Alphabet/Google) promoting racism, discrimination and violence, but also the risk it poses to long-term shareholder wealth due to the increased likelihood of legal, regulatory, advertiser and consumer backlashes. These dangers already have emerged in the form of the summer 2020 boycott of Facebook by advertisers and the more recent Trump Administration/Federal Communications Commission (FCC) Section 230 reprisal aimed in large part at Twitter.

Natasha Lamb, managing partner and portfolio manager, Arjuna Capital, said: “When you concentrate power in the hands of a few people and grant them the enormous reach of the social media companies, you have a prescription for inaction on hate speech.  Despite some fitful reform efforts, Facebook, Twitter and Alphabet’s YouTube have dropped the ball on curbing hate speech, racism, sexism, and disinformation.  Why is that?  None of these companies has a civil rights and/or human rights expert on their boards.  They are literally flying blind with no relevant expertise to guide their management.  This poses an unacceptably high risk to not only their users but to the long-term wealth of shareholders, who deserve better.”

Though the three shareholder resolutions contain similar language, each is tailored to the specific social media company it addresses.  In the case of Facebook, the resolution reads in part:

“Shareholders are concerned Facebook’s content governance has proven ineffectual and poses risk to shareholder value.  Over 300 advertisers boycotted the platform beginning in June 2020 after civil rights groups, critical of Facebook for failing to address hate speech, launched the ‘Stop Hate For Profit’ campaign.” 

“Following Facebook’s civil rights audit, the New York Times reported, ‘Auditors handpicked by Facebook to examine its policies said that the company had not done enough to protect people on the platform from discriminatory posts and ads and that its decisions to leave up President Trump’s inflammatory posts were “significant setbacks for civil rights.’”

“Civil rights group, Color of Change, has criticized Facebook for “doubling down on a business model that…fundamentally lacks an understanding of how civil rights, voter suppression, and racism actually function in this country …”

“The Christchurch terrorist attack in New Zealand, livestreamed on Facebook, led to a global call to limit the spread of extremist content. Yet despite Facebook’s subsequent ban of white nationalist content, in August 2020, white nationalist militia Facebook group, the Kenosha Guard, issued a ‘call to arms,’ which was flagged over 455 times, ignored by moderators, and preceded the murder of two protestors …” 

“In October 2019, over 40 civil and human rights organizations urged Facebook to consider the ‘protection of civil rights as a fundamental obligation as serious as any other goal of the company.’  Recommendations included diversifying the Board to include civil rights expertise.” 

“As fiduciaries, our Board is responsible for stewardship of business performance and long-term strategic planning, in light of risk factors like widespread violations of human and civil rights.”