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US proxy advisor accuses Zuckerberg of 'hubris' over Facebook voting rights control.

London, Feb 14 ( ANI ): A prominent American proxy advisory firm has accused Facebook founder Mark Zuckerberg accused of 'hubris', criticizing his plan to use a dual class share structure to maintain control of voting rights at the firm even after the multi-million dollar flotation.

The prospectus published last month by Facebook disclosed that Zuckerberg, 27, will control almost 57percent of voting rights on all key decisions at the company.

Institutional Shareholder Services (ISS), which advises over 1,500 institutional investors on corporate governance, said that the firm's dual-class share structure diminishes shareholder rights and limits the accountability of its board of directors to investors, The Telegraph reports.

"This is a governance profile with a defence against everything [except] hubris," ISS said in a report sent to clients.

"This IPO event itself presents a Hobson's choice: accept governance structures which diminish shareholder rights and board accountability, or miss out on what appears to be one of the hottest business models of the internet age," ISS said in the report.

According to the paper, given Facebook's growth, allowing Zuckerberg control may look sensible now, ISS argued.

The shareholder group, however, said that 'the real dilemma of Facebook's dual-class structure will only become evident when (or in a best-case scenario, if) an autocratic model of governance makes it less viable than a competitor whose governance gives owners a voice proportionate to the economics they have at risk.' ( ANI )


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Publication:Asian News International
Date:Feb 14, 2012
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