Facebook Inc. (NASDAQ: FB) has reshuffled management as it tries to pull its way out of the scandal involving the use of member information by a firm that may have attempted to influence the outcome of the 2016 election. Perhaps just as important was a major shift in the composition and duties of members of the Facebook board of directors.
Rumors are that Jan Koum, the founder of WhatApp, a company Facebook bought for $19 billion last June, was extremely upset about how outsiders got access to membership data, which triggered the scandal. He also has left as an employee of the company. Facebook did not give a reason for his departure.
Kenneth I. Chenault will join the board’s audit committee. As a former CEO of American Express, Chenault is clearly a financial heavyweight. He replaces Susan D. Desmond-Hellmann. As CEO of the Gates Foundation and the former head of product development at pharmaceutical firm Genetech, she was hardly qualified for the job. She replaces venture capitalist Marc L. Andreessen on the compensation and governance committee. Andreessen has ties that go back to before he became a director in 2008.
Andreessen will become part of the audit committee, which is chaired by Erskine B. Bowles. Bowles was White House Chief of Staff in 1997 and 1998 under President Clinton.
Other than Desmond-Hellmann, the compensation and governance committee will include highly controversial venture capitalist Peter A. Thiel, a supporter of President Trump and chair of secretive consulting firm Palantir, which does a great deal of work for the U.S. government. Netflix founder Reed Hasting will be chair of the Facebook compensation and governance committee.
One point outsiders could make is that Facebook founder and CEO Jeff Zuckerberg controls the board and the company because of his voting shares. This is true, but Zuckerberg’s image has been hurt by the membership information scandal. He may be best served by a strengthened board, which also will foster the idea he has surrounded himself by extremely competent people. And he may even take some of their advice.
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