Facebook Adds Amex’s Chenault as First Black Board Member

By Douglas A. McIntyre Updated Jan 12, 4:20AM EST · Published Jan 19, 6:25AM EST

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Facebook Inc. (NASDAQ: FB) added American Express Co. (NYSE: AXP) board chair and chief executive, Kenneth I. Chenault, to its board. He is the first person of color in that role. He will join February 5 and will retire from Amex on February 1.

His role at Facebook, like that of other directors, is undermined by the fact that founder Mark Zuckerberg holds control of the company due to its share structure.

Facebook CEO Zuckerberg said:

I’ve been trying to recruit Ken for years. He has unique expertise in areas I believe Facebook needs to learn and improve — customer service, direct commerce and building a trusted brand. Ken also has a strong sense of social mission and the perspective that comes from running an important public company for decades.

Chenault is also on the boards of IBM and Procter & Gamble, two deeply troubled companies.

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Chenault joins current board members Zuckerberg; Marc L. Andreessen of Andreessen Horowitz; Erskine B. Bowles, president emeritus, University of North Carolina; Susan D. Desmond-Hellmann, CEO, Bill and Melinda Gates Foundation; Reed Hastings, board chair and CEO at Netflix; Jan Koum, founder and CEO, WhatsApp; Sheryl K. Sandberg, Facebook’s chief operating officer; and Peter A. Thiel, Founders Fund.

The board of Facebook has an odd role. Zuckerberg controls a majority of the social media company’s voting shares, which makes the board’s power at the company less than it would be at a public company with a more traditional shareholder base. Facebook’s 10-K describes the situation:

Mark Zuckerberg, our founder, Chairman, and CEO, is able to exercise voting rights with respect to a majority of the voting power of our outstanding capital stock and therefore has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets. This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other stockholders support, or conversely this concentrated control could result in the consummation of such a transaction that our other stockholders do not support.

Zuckerberg has a board made up of prominent businesspeople, but that does not mean that they have the ability to affect the company’s present or future.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.