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Facebook's (FB) Board Now as Diversified as Ever... As In, Not Really

June 27, 2012 9:59 AM EDT Send to a Friend
Facebook (Nasdaq: FB) shares are trading lower Wednesday morning as Wall Street traders have their eyes on a slew of new analyst coverage following the expiry of its 40-day post-IPO quiet period. The reason for the move lower in the stock, however, might not be tied to analyst sentiment at all.

According to an op-ed piece in Reuters, although some things have changed atop Facebook's corporate structure, the moves haven't been very drastic. On Monday, Facebook appointed COO Sheryl Sandberg to its Board of Directors, potentially in response to scrutiny the Board is one of the least diversified around.

In this case, diversity isn't an old wooden ship used during the Civil War era.

The op-ed suggested the addition of Sandberg to the Board was like an 'FU' to Wall Street and investors. It's like Facebook said, "Okay, we're not diversified? Fine, here's a woman." Meanwhile, said woman is already a higher-up in the company and offers little in the way of outside viewpoints.

But with CEO Mark Zuckerberg holding over 50 percent of the voting rights, the Board's opinion may ultimately mean little.

One positive is there's now another executive in the Board room aside from Zuckerberg. Anyone who has seen Sandberg speak knows she is on level shoulders and spews authority.

However, for a user unhappy with privacy or other policy changes or a shareholder looking for more transparency, some insight into the botched IPO and/or lack of communication out of Facebook in the subsequent weeks...tough. Sandberg's appointment won't do much to change those issues.

Though the move was certainly a step in the right direction, Facebook still needs to reach beyond its Silicon Vally bubble and into the real world for a truly independent director. Several of the Board members are or have been heads at venture capital firms and there's always Netflix (Nasdaq: NFLX) CEO Reed Hastings.

Or else, what is the whole checks-and-balances system of a Board for anyway?




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