Mark Zuckerberg, chief executive officer and founder of Facebook Inc., speaks during the Oculus Connect 3 event in San Jose, California. (Photographer: David Paul Morris/Bloomberg)

Ailman Says Facebook Crisis Fueled by Zuckerberg Star Status

(Bloomberg) -- Facebook Inc.’s data privacy crisis was fueled by Chief Executive Officer Mark Zuckerberg’s near total control of the company, said Chris Ailman of the California State Teachers’ Retirement System.

“We’re unhappy with the governance of Facebook,” Ailman, the chief investment officer of CalSTRS, said in an interview Monday on Bloomberg Television. “People ought to pay attention and realize it’s not effective to have one person as king of the company. We want to vote in a board of directors that will hold management accountable for how they operate.”

Ailman, 59, recently captured attention after deactivating his personal Facebook account last week, joining the ranks of high profile individuals including Elon Musk who have nixed their accounts as a part of the broader #DeleteFacebook protest. In an April 6 tweet, Ailman called the social media giant’s lack of oversight and poor management “offensive.”

Silicon Valley is enamored by the “star quality” of CEOs “but it’s not effective for corporate governance,” Ailman said.

CalSTRS is the nation’s second largest public pension fund with $225 billion of assets under management and a $931.2 million stake in Facebook. Shortly after Ailman deactivated his account, the fund disclosed plans to seek information from Facebook management on the steps the company is taking to keep user data safe.

This is not the first time that Ailman, who joined CalSTRS almost two decades ago, has taken aim at Facebook. He expressed concern over the lack of women on the social media giant’s board of directors in the years following its public offering in 2012.

CalSTRS has gone as far as divesting from companies, and entire industries, when its board identifies concerns. In February 2016, the pension system voted to divest from U.S. companies that produce thermal coal, the most polluting fossil fuel, because of the industry’s ailing finances and environmental impact.

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