Facebook has increased the power that the company’s audit committee has in an attempt to avoid another data scandal, in what is being considered an attempt to satisfy shareholders.
Facebook’s audit committee, which is currently overseen by former White House chief of staff Erskine Bowles, changed its name from “the audit committee” to “the audit and risk oversight committee,” Business Insider reports. Along with a name change, the powers of the committee and the aspects of Facebook that the committee oversees were also expanded.
The committee will now focus on three major issues:
- How Facebook “services can be used to facilitate harm or undermine public safety or the public interest.” The committee will now review all of Facebook’s services to ensure that they are not at risk of facilitating harm. This may include political issues such as fake news.
- Facebook’s “privacy program” will undergo a full investigation. This is likely a followup on the Cambridge Analytica scandal that Facebook recently dealt with. During this scandal, the personal details of 87 million users were compromised.
- The committee will also analyze Facebook’s “cybersecurity risk exposures.” This is likely a typical security audit that most digital companies undergo to ensure that there are no internal data breaches or leaks and that company systems are not vulnerable to hacking.
These reviews will be conducted once a year by Erskine Bowles and industry executives Marc Andreessen, Kenneth Chenault, and Jeffrey Zients. Facebook’s decision to provide more power to the committee is likely a result of pressure from shareholders, a proposal for an independent oversight committee was tabled at Facebook’s investor meeting last month after 45 percent of the company’s independent shareholders expressed support for it.
Senior vice president of Trillium Asset Management, Jonas Kron, tabled the idea on behalf of its client the Park Foundation, and welcomed Facebook’s decision to increase the power of its audit committee, telling Business Insider: “This is a very necessary and positive development. It provides investors with a clearer understanding of who has ultimate responsibility for overseeing privacy, social impact, cybersecurity, and compliance.”
Kron manages approximately $10 million of Facebook’s stock on behalf of the Park Foundation and warned that the committee should be given appropriate power over Facebook’s management and should meet approximately every three months, or twice a year.