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Harvard’s Shareholder Panel Votes On Three Facebook Governance Measures

A report issued earlier this month detailed votes conducted by Harvard's committees on shareholder responsibility, which advise the University on matters related to social responsibility in its investment decisions.
A report issued earlier this month detailed votes conducted by Harvard's committees on shareholder responsibility, which advise the University on matters related to social responsibility in its investment decisions. By Steve S. Li
By Virginia L. Ma and Kevin A. Simauchi, Crimson Staff Writers

Harvard’s committees on shareholder responsibility — composed of an advisory committee and a sub-group of the Harvard Corporation that advise the University on matters related to social responsibility in its investment decisions — voted on three resolutions presented to Facebook shareholders during the last fiscal year, according to a report published earlier this month.

The Advisory Committee on Shareholder Responsibility is comprised of 12 University affiliates who advise the Corporation Committee on Shareholder Responsibility, which consists of members of the Harvard Corporation — the University's highest governing body — who have voting power.

The report, which spanned the past two academic years, included nine new guidelines for the Harvard Management Company’s external investment managers. It also summarized the votes on the three resolutions presented to the shareholders of Facebook, the tech giant that was renamed Meta in October.

The Corporation Committee voted in support of two shareholder resolutions that would ask Facebook to detail the extent to which it addresses issues of child exploitation and “disinformation.”

The first resolution requested that Facebook combat the sexual exploitation of children with new privacy tools, such as end-to-end encryption to protect underage users.

CCSR members voted in favor of the proposal following the recommendation of the ACSR. Members of the advisory group noted the “seriousness of online child sexual exploitation” and Facebook’s influence in the matter, according to the report.

“Members also expressed the view that Facebook has a responsibility to understand and communicate to shareholders the potential implications of a broad shift to end-to-end encryption, especially as it relates to the company’s ability to continue detecting and addressing exploitative content and behavior,” the report continues.

The second resolution approved by the CCSR asked Facebook to study the benefits and harms to the company and its employees of the platform’s actions instituted during the 2020 election cycle to “limit the spread of disinformation and ‘divisive information.’”

The committee voted in favor of the proposal, in line with the unanimous recommendation of the ACSR, citing the University’s past support of similar measures requesting Facebook to publish reports evaluating policies on content governance and assessing risks of such strategies.

The CCSR abstained, however, on another resolution calling for the nomination of a human and civil rights expert to Facebook’s Board of Directors. The ACSR recommended a vote against the resolution, noting that the company already hired two senior managers with civil and human rights experience.

The report also mentioned that some members wondered how Facebook could determine whether an individual qualifies as an expert and suggested that the scope of expertise was “ill-defined.”

Committee members also worried that adding a rights expert to the board could absolve the rest of Facebook’s corporate management from the responsibility of engaging with issues related to human and civil rights, according to the report.

In recent years, the Harvard Management Company has relied on investments managed by outside firms to gain better exposure to public equity markets. In response to the move, both committees have shifted their focus on developing guidelines that can help Harvard's external investment managers.

In 2019-20, the Corporation Committee voted on two resolutions presented to companies in which the University held shares — PepsiCo, Facebook, and Alphabet are named in the report — and abstained on all other measures.

The report claimed that the ACSR did not have time to review the social responsibility consequences of these resolutions, citing the “extraordinary circumstances” of the Covid-19 pandemic.

“Following long-standing practice with proxies not considered by the ACSR, the CCSR voted on two such proposals in 2020 for which prior ACSR recommendations and CCSR votes provided controlling precedent,” the report reads.

In 2020, the ACSR resumed deliberations and created nine new voting guidelines related to Environmental, Social, And Governance, Board Diversity, Deforestation Risk, Human Rights Policy, Diversity, and Water Contamination Risk.

—Staff writer Virginia L. Ma can be reached at virginia.ma@thecrimson.com.

—Staff writer Kevin A. Simauchi can be reached at kevin.simauchi@thecrimson.com. Follow him on Twitter @Simauchi.

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