Facebook Inc. (NASDAQ: FB) added American Express Co. (NYSE: AXP) board chair and chief executive, Kenneth I. Chenault, to its board. He is the first person of color in that role. He will join February 5 and will retire from Amex on February 1.
His role at Facebook, like that of other directors, is undermined by the fact that founder Mark Zuckerberg holds control of the company due to its share structure.
Facebook CEO Zuckerberg said:
I’ve been trying to recruit Ken for years. He has unique expertise in areas I believe Facebook needs to learn and improve — customer service, direct commerce and building a trusted brand. Ken also has a strong sense of social mission and the perspective that comes from running an important public company for decades.
Chenault is also on the boards of IBM and Procter & Gamble, two deeply troubled companies.
Chenault joins current board members Zuckerberg; Marc L. Andreessen of Andreessen Horowitz; Erskine B. Bowles, president emeritus, University of North Carolina; Susan D. Desmond-Hellmann, CEO, Bill and Melinda Gates Foundation; Reed Hastings, board chair and CEO at Netflix; Jan Koum, founder and CEO, WhatsApp; Sheryl K. Sandberg, Facebook’s chief operating officer; and Peter A. Thiel, Founders Fund.
The board of Facebook has an odd role. Zuckerberg controls a majority of the social media company’s voting shares, which makes the board’s power at the company less than it would be at a public company with a more traditional shareholder base. Facebook’s 10-K describes the situation:
Mark Zuckerberg, our founder, Chairman, and CEO, is able to exercise voting rights with respect to a majority of the voting power of our outstanding capital stock and therefore has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets. This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other stockholders support, or conversely this concentrated control could result in the consummation of such a transaction that our other stockholders do not support.
Zuckerberg has a board made up of prominent businesspeople, but that does not mean that they have the ability to affect the company’s present or future.