Several large technology companies faced increased scrutiny from institutional investors on issues ranging from board diversity and independence to voting structures, content-management enforcement and risk management at recent annual meetings.
There were some immediate shareholder victories. At Facebook Inc.'s annual meeting May 31, Chief Operating Officer Sheryl Sandberg announced the company was establishing a policy to consider diverse candidates for vacant director positions. Amazon.com Inc. officials made a similar announcement in the days leading up to its May 30 shareholder meeting.
Whether companies will adopt the other governance changes investors seek, however, remains to be seen. Along with Facebook and Amazon, annual shareholder meetings for Twitter Inc., Alphabet Inc. (the parent company of Google), and Tesla Inc. all took place within the past two weeks.
At Twitter, a shareholder proposal requesting the company report on how it enforces its terms of service to prevent election interference, fake news, hate speech and sexual harassment from being posted to its platform was supported by 36% of shareholder votes. The non-binding proposal required a majority vote to pass.
At Facebook, where CEO and Chairman Mark Zuckerberg controls about 60% of the voting rights, the same proposal was supported by 10% of total votes. New York state Comptroller Thomas DiNapoli's office estimates at least 40% of non-management votes supported the proposal. At Alphabet, the proposal was supported by 13% of total votes. Alphabet, like Facebook, has a dual-class share structure.
In the proposals at Facebook, Twitter and Alphabet, the filers — Mr. DiNapoli, sole trustee of the $206.9 billion New York State Common Retirement Fund, Albany, and Arjuna Capital — pointed to the global controversies the companies faced over reported election interference, the dissemination of "fake news" and hate speech, among other issues. The investors, who describe the companies' current content policies as "reactive, not proactive," expressed concern that failure to proactively address these issues poses "regulatory, legal and reputational risks to shareholder value."