A group of activist investors are pressuring major tech companies to overhaul their culture and business structure, proposing shareholder resolutions aimed at reorganizing senior leadership, ending certain business practices and censoring more online content.
The Investor Alliance for Human Rights, an initiative of the Interfaith Center on Corporate Responsibility, announced eight proposals this week from Facebook shareholders targeting the tech giant for several environmental, social and governance (ESG) issues. The proposals argue that Facebook’s recent scandals have damaged its reputation and seek to address the spread of “hate speech and misinformation” on the platform, as well as “potential psychological, civil, and human rights harms.”
“Corporations have committed to building long-term value for all stakeholders, including customers, communities and employees” Anita Dorett, director of the Investor Alliance for Human Rights, told the Daily Caller News Foundation. “Investors expect companies including Facebook to put human rights before profits.”
Many of the proposals take aim at Facebook’s fundamental business model, which relies on harvesting user data to target personalized recommendations to users.
“Facebook’s AI- driven targeted advertising business model which accounts for 98% of its global revenue, violates users’ privacy rights and enables predatory and discriminatory advertising that exacerbates systemic inequalities,” Dorett told the DNCF. “Facebook’s business model exposes it to reputational, legal and financial risk that shareholders view as material to their investments.”
Arjuna Capital, one of the activist shareholders behind the proposals, introduced a shareholder resolution requesting a third-party assessment of the potential “civil and human rights harms” caused by Facebook’s Metaverse project.
“The same issues Facebook is reckoning with—discrimination, human and civil rights violations, incitement to violence, and privacy violations—will only be heightened in the metaverse,” Natasha Lamb, managing partner of activist investor firm Arjuna Capital, said in a statement. “That’s why investors need to understand the scope of these potential harms, and actually weigh in on whether or not this is a good idea before we throw good money after bad.”
Another proposal by investor non-profit group As You Sow requested Facebook’s board of directors prepare a report analyzing the giant’s content moderation policies haven’t removed enough “hate speech, disinformation, and content that incites violence.”
“Although Meta has created monitoring systems across 25 Community Standards, the platforms still continue to promote hate speech and disinformation with content that incites violence and harm to public health and personal safety,” As You Sow CEO Andrew Behar said in a statement. “Shareholders need to understand why these technological solutions continue to fail to protect civil society. This is a material risk to the company and shareholders.”
The proposals represent the latest push by activist shareholders eager to change tech companies’ internal culture as well as certain business practices, most notably content moderation. Many of the firms involved in the latest action against Facebook have a long history of agitating for restructuring tech companies’ corporate leadership to meet “civil rights” goals, as well as taking aim at platforms for hosting “hate speech.”
Arjuna Capital introduced shareholder proposals at Twitter, Facebook and Google requesting in April 2021 the nomination of a candidate to the companies’ board of directors with “human and/or civil rights expertise” who will hold no shares of the company but will “steward company decisions.”
In its Google proposal, the firm alleged the tech giant had a history of “failing to address hate speech that targets communities of color and marginalized groups,” as well as “its role in steering consumers toward racist, violent, discriminatory, rights-violating or disinformation content.” Arjuna also alleged Facebook’s “track record on civil and human rights issues has been abysmal” and claimed the company was “perpetuating racial bias.”
Similarly, As You Sow had proposed a shareholder resolution in December 2020 requesting Facebook draft an assessment on whether or not it should keep in place its heightened content moderation policies for the 2020 presidential election, which more aggressively targeted “false and divisive information.”
Arjuna’s Facebook proposal cited comments made by Rashad Robinson, CEO of left-wing advocacy group Color of Change as further evidence of Facebook’s role in facilitating the spread of racism, pointing to Robinson’s remarks in which he criticized Facebook for not adhering to “the spirit and the letter of civil rights laws.”
Robinson is a vocal advocate for tech companies to censor more content, pushing asking Facebook to remove anti-immigration ads promoted by former President Donald Trump’s re-election campaign and characterizing the messages as “implicit expressions of white nationalism.” Color of Change also agitated for tech companies to undergo racial equity and civil rights audits, calling on Democratic lawmakers to pass legislation requiring the audits.
While Arjuna’s 2021 proposals regarding civil rights experts failed, the firm successfully won over Microsoft shareholders in late November to back a proposal requiring the company to report on “the effectiveness of the company’s workplace sexual harassment policies” and “commitments to create a safe, inclusive work environment.”
However, the firm failed to win support for another proposal requiring Microsoft to issue a report on “median pay gaps across race and gender” as well as “associated policy, reputational, competitive, and operational risks, and risks related to recruiting and retaining diverse talent.”
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