Managing the Unintentional Consequences of Social Media
The emergence of digital technologies over the last two decades is analogous to the first 20 years of the “Green Revolution” in agriculture. At the time, that revolution was credited with saving millions, if not a billion people, from starvation, increasing food security and driving down the price of food. But as time wore on, we saw the unintended negative consequences of these agricultural technologies: human health impacts from agricultural chemicals, habitat destruction, greenhouse gas emissions, obesity and social disruptions. We may be fast approaching a similar point in the history of digital technologies as we seek to balance, understand and address their positive and negative impacts.
With this context in mind, a key player in our digital economy, Facebook, is of particulate interest. The company offers some genuinely useful and profitable products that help connect people, but it is also at the center of ferocious debates about the harms it may be facilitating or inflicting on society.
Until 2014, Facebook’s mantra was “move fast and break things” and unfortunately, it appears that Facebook may in fact be breaking many things. For example:
- Research linking Facebook to depression and other mental health issues;
- Investigations into Russian meddling in U.S. elections and its role in proliferating “fake news”;
- Concerns over censorship and incitement to violence in Myanmar and India;
- Growing public and policy attention to the anti-competitive implications of platform monopolies; and
- Criticism from the Congressional Black Caucus over diversity and race relations.
As investors in Facebook, we are deeply concerned about what will happen next – not only to the company, but also to the people and communities that use Facebook every day. Specifically, we believe the company would be on more solid footing and be able to serve its users more beneficially if it created a board oversight committee dedicated to addressing these risks. Trillium filed a shareholder proposal to do just that as we believe this committee would serve as a way for the board to address the strategic changes that the company must contemplate in light of the products impact on society.
As the Conference Board in the Harvard Law School Forum on Corporate Governance and Financial Regulation put it: “A risk committee fosters an integrated, enterprise-wide approach to identifying and managing risk and provides an impetus toward improving the quality of risk reporting and monitoring, both for management and the board. This approach can assist the board in focusing on the ‘big picture.’”
We believe this big picture includes the company’s impact on society and how it takes responsibility for these impacts.
This is not a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. The specific securities were selected on an objective basis and do not represent all of the securities purchased, sold or recommended for advisory clients.
Director of Shareholder Advocacy, Trillium Asset Management