Hedge Fund Trillium Rallies Shareowners to Vote for Creation of Facebook Oversight Board

Activist hedge fund Trillium Asset Management ($2.5 billion) is encouraging Facebook shareholders to vote in favor of a recent proposal calling for the creation of a risk oversight board to govern the social media giant after its poor handling of recent controversies.

In a Tuesday letter to fellow owners, Trillium cited the “sheer volume, magnitude, and frequency” of controversies as the main reason for Facebook to “institutionalize stronger risk oversight mechanisms,” calling the company’s current method of solving issues an insufficient “whack-a-mole approach.”

In addition to the lack of necessary focus Facebook’s governance policies may have, Trillium said the social media entity can learn from Microsoft’s past dealings with public and government issues and adopt a similar structure to Microsoft’s four governance committees, implemented sometime after co-founder Bill Gates’ 1998 Congressional testimony, which bears some similarities to CEO Mark Zuckerberg’s case.

Facebook’s most recent cause for alarm was the March reveal of unauthorized pillaging of personal information by political data firm Cambridge Analytica. Facebook has also been the target of scrutiny over its actions regarding Russia’s alleged meddling in the 2016 US presidential election as well as proliferating the spread of “fake news,” censorship in China, and various other claims addressed in Trillium’s letter.

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Last week, Zuckerberg testified before Congress about the Cambridge data raid and other growing concerns regarding the social media platform, answering more than 500 questions.

In response to the risk oversight criticisms, Facebook said in a proxy statement that its current approach to risk oversight “ensures that we identify, evaluate, and address our unique risks while providing a “big picture” perspective through regular engagement with key members of management and appropriate delegation to our current board committees.”

However, the general public and investors might not be buying what the social media titan is selling as far as oversight goes as a survey by independent research firm the Ponemon Institute reveals that Facebook’s user trust has dropped 66% since the data scandal. Reuters reports that the company has lost roughly $47 billion in market value since the scandal.

Although the hedge fund admitted in its SEC filing that the creation of the board is not the be-all-end-all solution to the problem, it called the move an “important piece of a slate of governance reforms” which includes making changes to the company’s dual-class structure and splitting the roles between chairman of the board and CEO.

With $2.5 billion worth of assets under management, Trillium owns about 73,000 shares of Facebook.

Tags: Facebook, FANG, Governance, Trillium

In a move toward a possible strike, workers at Bentley Motors headquarters in Crewe, UK, have voted in support of industrial action in a consultative ballot over plans to close the company’s defined benefit pension plan.

Members of union Unite, including car production workers, senior staff, and managers, backed a strike action by an overwhelming 98% on a 92% turnout in the consultative ballot. The union warns that the move to close the pension plan could cost Bentley workers tens of thousands of pounds in retirement income a year.

“This massive vote in favor of action demonstrates the anger and strength of feeling among workers over Bentley’s pension proposals,” Phil Morgan, Unite regional officer, said in a release.

According to Unite, the proposal to close the defined benefit plan would affect 1,200 Bentley workers, who are members of the Rolls Royce and Bentley Pension Fund (RRBPF). Unite said it will now make arrangements to hold a full statutory industrial action ballot, which could result in a strike, unless Volkswagen-owned Bentley nixes the idea of shuttering its pension.

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“The union has presented counter proposals to the company as an alternative to the proposed closure of the pension,” said Morgan. “We would urge bosses at Bentley and its parent company Volkswagen to listen to the workforce and further engage in meaningful talks with Unite aimed at reaching a mutually acceptable position.”

Earlier this year, Bentley workers in Crewe received a letter from the company saying that a consultation would be held to review the winding down of the pension plan, which has been closed to new members since 2012.

“Although entering into a consultation is not an easy step to take, and no decisions have been made, the RRBPF deficit is more than £500 million and the cost of funding the scheme has increased by 50% in the past five years,” said a company spokesperson in January, when workers staged a short protest over the matter, according to news reports. “While funding is in place to secure members’ contributions, the ongoing level of financial risk is unsustainable.”

According to the company, the proposal will affect 28% of Bentley employees, who are still accruing benefits in the defined benefit plan, while the remaining employees will be enrolled in a defined contribution plan.

Tags: Bentley, Rolls Royce, strikes, Union