CalSTRS Focus on Facebook

In the wake of highly publicized recent data privacy breaches, concerns over the governance structure at Facebook are once again taking center stage.

CalSTRS, who previously voiced concerns over governance controls and board oversight, are preparing a letter to send to the company to voice their concerns in an effort to engage the company directly, and likely to illicit support from other stakeholders.

Christopher Ailman, CalSTRS CIO, recently deleted his personal Facebook account, stating that he felt that the company’s “governance is terrible.” Aeisha Mastagni, a portfolio manager in the CalSTRS’ corporate governance unit, issued a written statement in which she commented, “Additionally, we would like to understand what additional steps Facebook is taking to protect this data in order to regain the trust of their users, the public and their shareholders.”

Other asset owners have voiced similar concerns in the past, so it appears CalSTRS will have support for various initiatives to engage Facebook and seek resolutions. These may go beyond data privacy and cybersecurity. Concerns over board oversight, shareholder rights and diversity have been expressed, especially given the company’s growth and evolution.