Opinion

Lucy P. Marcus

Facebook’s board needs more than Sheryl Sandberg

By Lucy P. Marcus
June 26, 2012

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 year’s “Shareholder Spring” – 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 doesn’t have the teeth to do much about it.

Sandberg may come on to the board with full voting rights, but her vote won’t count for much if a boardroom battle occurs, since Mark Zuckerberg holds more than 50 percent of the company’s voting shares.

As COO she may not be an independent board member, but one positive change from Sandberg’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 doesn’t address the wider issues that are still at play. If, as a user, you were unhappy with Facebook’s policies – be it privacy issues or inadequate information about changes to the site – or, as a stockholder, you were unhappy about a botched IPO and a lack of communication from Facebook during the weeks that followed, then Sandberg’s appointment to the board won’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 – putting a woman on the board because it looks odd not to have one – 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.

PHOTO: Sheryl Sandberg, Facebook’s chief operating officer, speaks during Class Day ceremonies at Harvard Business School in Allston, Massachusetts, May 23, 2012. REUTERS/Brian Snyder

Comments
3 comments so far | RSS Comments RSS

Thanks for a judicious, candid assessment!

It’s unfortunate that the term “diversity” has come to be associated with the need for women to be better represented in traditionally male preserves, and other ethnicities in traditionally white. There are indeed issues of equity to be addressed. But the core need for “diversity” on boards and in leadership more generally has less to do with gender and pigmentation and everything to do with perspective. Monochrome and monogendered bodies are far less suited to governance. And while that has always been true, at a time of rapid, exponential, change, it is risible that anyone could suggest anything other. Radical diversity of perspective is crucial to managing increasingly rapid change.

I’ve discussed this at more length here:
http://futureofbiz.org/2012/06/26/facebo ok-diversity-and-leadership-in-the-c21-c orporation/

Posted by NigelCameron | Report as abusive
 

Lucy, you left out one not unlikely possibility.

Maybe there’s not a qualified woman out there who’s willing to work under the conditions that the rest of the board works. The board itself is “optics” and it’s surprising that anyone who one would want to serve on it would want to be in such a powerless role.

Posted by WeWereWallSt | Report as abusive
 

I find it unfortunate that a defined search for a woman is myopic, when it should be a broad and deep search for the right person man or woman.

Posted by jake50 | Report as abusive
 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •