Facebookâ€™s board needs more than Sheryl Sandberg
When news emerged in May that Facebook had hired an executive search firm to look for a woman to add to its board of directors, I had hoped that with the appointment would come a great deal of diversity of thought and experience and an independent voice. Facebook has now announced that it has chosen its COO, Sheryl Sandberg, to join its board. Having Sandberg on the board is a good step, but does it address the larger shortcomings that are concerning Facebook users and investors?
Facebook has the same problems it had a month ago, and the company is still running counter to this yearâ€™s â€œShareholder Springâ€ â€“ a global movement toward transparency, engagement, and checks and balances on corporate boards. The newly public company lacks diversity of thought and international experience outside of the Silicon Valley bubble; and because Facebook is a controlled company, if the board takes issue with something, it doesnâ€™t have the teeth to do much about it.
Sandberg may come on to the board with full voting rights, but her vote wonâ€™t count for much if a boardroom battle occurs, since Mark Zuckerberg holds more than 50 percent of the companyâ€™s voting shares.
As COO she may not be an independent board member, but one positive change from Sandbergâ€™s appointment is that it brings another internal executive voice to the table. Sandberg is capable, speaks with authority and knowledge, knows Facebook inside and out, and has strong board experience. It will certainly be important that there is more than one executive voice in the boardroom.
Yet her appointment doesnâ€™t address the wider issues that are still at play. If, as a user, you were unhappy with Facebookâ€™s policies â€“ be it privacy issues or inadequate information about changes to the site â€“ or, as a stockholder, you were unhappy about a botched IPO and a lack of communication from Facebook during the weeks that followed, then Sandbergâ€™s appointment to the board wonâ€™t make much of a difference to you.
What does Facebook still need if it is to fix these issues? It needs an outside independent director, preferably a woman with strong international experience who adds diversity of opinion, experience, skill, cultural background, and more. This is not a matter of optics â€“ putting a woman on the board because it looks odd not to have one â€“ but rather an issue of good governance.
The timing of the announcement is not coincidental: Wednesday, June 27, marks the end of the 40-day post-IPO quiet period, when analysts from the underwriting banks, including Morgan Stanley, Goldman Sachs, and JPMorgan, can begin offering up opinions on Facebook. Is adding Sandberg to the board going to be enough to counterbalance the concerns that investors and analysts have about the company? Unlikely.