Chenault has been with American Express for 37 years, and he is retiring as chairman and CEO effective Feb. 1, to be succeeded by vice chairman Stephen Squeri.
Zuckerberg said in a Newsroom post announcing the appointment, “I’ve been trying to recruit Ken for years. He has unique expertise in areas where 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.”
Jackson addressed the subject briefly during the 2017 annual meeting, and he said at the company’s 2015 annual meeting, “Donald Graham has left your board. Facebook made a commitment to replace him with an African American or a person of color. And you agreed to place a ballot amendment that will imply an exclusive and active search for women and people of color for all future board openings. We have people who are qualified right now, and we hope the board does not shrink … We must make the board look like America.”
He made a similar plea at the 2014 annual meeting, saying, “At least would you make a commitment to include blacks and Latinos on your board of directors? Specifically, would you agree to place a bylaw and amendment similar to Apple that will require an explicit and active search for women and people of color for all of your board openings? Will Facebook commit to a bylaw provision to mandate that women and people of color are included as part of any search for C-suite-level positions? Will Facebook commit to the inclusion of black and minority firms in all debt offerings and future financial transactions, and building pipelines for education?”
Jackson praised the addition of Chenault to Facebook’s board of directors in a tweet (embedded below), and he added in a press release, “I’ve known Ken for decades. He is one of the country’s pre-eminent business leaders and thinkers. Facebook is fortunate to have him. During a public conversation with New York Times business columnists and editors in November, Ken said, ‘At the end of the day, one of the biggest issues for our society is diversity and inclusion. Despite the depressing numbers, there are incredibly qualified people out there who can move into those positions. We’ve got to move them into the pipeline.’ He is absolutely right. When there is inclusion, there is growth, and when there is growth, everyone wins. It’s just good business.”
According to Facebook’s corporate governance guidelines, the board of directors has the authority to adjust the number of members, but the addition of one more member will likely have no effect on Zuckerberg’s control over the company.
Zuckerberg retains voting control over Facebook, and the board has traditionally been Zuckerberg-friendly.
Facebook announced a proposal during its first-quarter-2016 earnings report to create a new class of non-voting capital stock, class-C capital stock, and it had planned to issue two class-C shares as a one-time dividend for each outstanding class-A and class-B share of common stock.
The creation of the class-C stock would have enabled Zuckerberg to fulfill his promise of selling 99 percent of the shares in the company owned by him and his wife, Priscilla Chan, in order to advance charitable fund the Chan Zuckerberg Initiative, while still retaining voting control over the company.
But a class-action suit filed in May 2016 claimed that the company “did not bargain hard [with Zuckerberg] … to obtain anything of meaningful value” in exchange for the control he would retain over Facebook, adding: “The issuance of the class-C stock will, in effect, have the same effect as a grant to Zuckerberg of billions of dollars in equity, for which he will pay nothing.”
Facebook then withdrew the stock-reclassification proposal last September, with Zuckerberg saying at the time, “Over the past year-and-a-half, Facebook’s business has performed well, and the value of our stock has grown to the point that I can fully fund our philanthropy and retain voting control of Facebook for 20 years or more.”
Chenault is not replacing anyone. He will join Facebook’s eight existing directors:
- Andreessen Horowitz co-founder and general partner Marc Andreessen
- University of North Carolina president emeritus Erskine Bowles
- Bill & Melinda Gates Foundation CEO Susan Desmond-Hellmann
- Netflix chairman and CEO Reed Hastings
- WhatsApp founder and CEO Jan Koum
- Chief operating officer Sheryl Sandberg
- Founders Fund co-founder and general partner Peter Thiel
- CEO Mark Zuckerberg