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The Subordinated Board: Facebook

In: Disaster in the Boardroom

Author

Listed:
  • Gerry Brown
  • Randall S. Peterson

    (London Business School)

Abstract

A subordinated board is one that is incapable of acting independently of the executive. This subordination sometimes happens when the organization has a dominant CEO with a strong character, but sometimes it happens because of the way power within the organization is structured, for example if the chief executive is also a dominant shareholder and/or has the power to control appointments to the board. When this happens, it becomes hard—if not impossible—for the board to exert proper scrutiny and call the CEO to account. We explore Facebook as an example of a company where the board has consistently struggled to make any impact or rein in the senior executive team. It is corporate governance in name only. As founder, CEO and chairman of Facebook, Mark Zuckerberg wields immense control over the company’s governance, despite its publicly owned status.

Suggested Citation

  • Gerry Brown & Randall S. Peterson, 2022. "The Subordinated Board: Facebook," Springer Books, in: Disaster in the Boardroom, chapter 5, pages 89-101, Springer.
    • Handle: RePEc:spr:sprchp:978-3-030-91658-9_5
    DOI: 10.1007/978-3-030-91658-9_5
    as

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