Facebook (NASDAQ:FB) is on the defensive (again) following a New York Times investigation released earlier this month, and CEO Mark Zuckerberg is falling back on the same strategy he has employed over the past two years: apologize publicly while vowing to improve the company he co-founded while stopping short of allowing meaningful management change. Even prominent Street analysts are calling for change, most recently Stifel analyst Scott Devitt, who suggested hiring a "well-respected external executive."
Don't forget that Facebook does not intend to replace Alex Stamos, who stepped down as chief security officer in August. Given the social network's woes, that seems like a pretty significant position to leave vacant. At least the company is shopping for a cybersecurity company to strengthen its platform.
Facebook's dynamic duo is here to stay, for better or for worse
Zuck sat down with CNN's Laurie Segall for an exclusive interview that was released yesterday, offering comments on several topics that have arisen in the wake of the Times story as well as a separate Wall Street Journal report that said he pinned some of the blame on COO Sheryl Sandberg. The tension even led Sandberg to question her job security, according to the WSJ, sparking investor speculation that she could be ousted from the social networking giant.
His Zuckness quashed that speculation in the interview:
Sheryl is a really important part of this company, and is leading a lot of the efforts to address a lot of the biggest issues we have. She's been an important partner for me for 10 years, and I'm really proud of the work that we've done together. I hope that we work together for decades more to come.
Asked if his power should be checked, clearly from a corporate governance perspective, Zuckerberg deflected and discussed partnering with governments around the world while pointing to an independent oversight group that Facebook is establishing for content moderation. That's important and all, but what investors really need is independent oversight of Facebook's management team, which it is sorely lacking.
Segall then asked him point blank whether he will step down as chairman, and Zuckerberg gave the expected response:
Zuckerberg: That's not the plan.
Segall: Would anything change that?
Zuckerberg: I mean, eventually, over time. I'm not going to be doing this forever. But I'm certainly not currently thinking that makes sense.
Zuckerberg has staunchly resisted growing calls from investors for him to step down as chairman or otherwise shake up the company's management structure. Sadly, there is no tangible recourse to force his hand, as he wields 60% voting power, which allows him to singlehandedly determine the board's composition, avoiding any semblance of accountability. None of this is news to investors, but in case there was any hope that Zuckerberg would voluntarily relinquish some of his power or had otherwise changed his thinking, those hopes can safely be buried.