By Paul Hodgson – CCO and Senior Research Associate
Facebook’s response to criticism that its board was, as GMI Ratings founder Nell Minow is fond of saying, male, pale and stale, has been to appoint Sheryl Sandberg to the board.
There are a number of problems with this offered solution. First, one woman on the board does not make a balanced board. Second, Ms. Sandberg is already an employee of Facebook, the firm’s COO, so this appointment does not add expertise it just duplicates it. Third, adding another insider to the board does nothing to increase the board’s independence which is already challenged. Fourth, two directors were nominated by CEO Mark Zuckerberg, two are investor directors, two have substantial related party transactions with the company, and the remaining two, Zuckerberg and Sandberg, are insiders. One wonders who nominated Ms. Sandberg.
If Facebook is having trouble finding directors with a diverse background, it might want to consult GMI Ratings’ Diverse Director Datasource. Plenty of candidates there.