Column: Facebook won’t dump billionaire Peter Thiel from its board because it cares about ‘diversity’
Mark Zuckerberg, the undisputed monarch of Facebook, took to his own website the other day to mount an impassioned defense of one of his handpicked board members, Peter Thiel.
“We care deeply about diversity,” Zuckerberg wrote. “That’s easy to say when it means standing up for ideas you agree with. It’s a lot harder when it means standing up for the rights of people with different viewpoints to say what they care about….That’s ultimately what Facebook is about: giving everyone the power to share our experiences, so we can understand each other a bit better and connect us a little closer together.”
That sounds proper superficially, as an answer to critics who argue that Thiel should be dumped from the board because of his association with Donald Trump and other reasons. Dig a little deeper, however, and it proves to be remarkably tone-deaf. So, too, does a defense of Thiel launched by executives at the Silicon Valley startup incubator Y Combinator, where Thiel is a partner. The partnership’s president, Sam Altman, has tweeted that he disagrees with Thiel’s support of Trump, but “YC is not going to fire someone for supporting a major party nominee ... We need to talk to each other more, not less…. Cutting off opposing viewpoints leads to extremism and will not get us the country we want.”
We care deeply about diversity.
Mark Zuckerberg defends keeping libertarian billionaire Peter Thiel on the Facebook board
A little background about Thiel might point to why he’s not just another employee with a heterodox political viewpoint, and why his role in Facebook, especially, warrants more than Zuckerberg’s casual brushoff.
Thiel is a billionaire, thanks to his role as co-founder of PayPal. He also was an early investor in Facebook, of which he owned about 1 million shares as of March 31, according to Facebook’s most recent proxy statement.
Thiel is a supporter of Donald Trump’s presidential campaign, to which he recently made a $1.25-million donation. That marks him as virtually unique in Silicon Valley; other than Thiel, not a single executive or major investor in a major high-tech company from the region appears on the list of corporate signers to an open letter supporting Trump released earlier this month. After Intel CEO Brian Krzanich abruptly canceled a fund-raiser for Trump at his home in June, the executive explained that he was not endorsing Trump (or any candidate), had intended the event to foster an “open dialogue,” and canceled it when it morphed into a fund-raiser.
An avowed libertarian, he lamented in a piece for the libertarian Cato Institute the “vast increase in welfare beneficiaries and the extension of the [voting] franchise to women.” Calling them “two constituencies that are notoriously tough for libertarians,” he wrote that the twin phenomena “have rendered the notion of ‘capitalist democracy’ into an oxymoron.”
By almost any measure, then, Thiel is an outlier in Silicon Valley. “Peter Thiel is a contrarian,” Amazon founder Jeff Bezos said in a recent interview, adding, “You have to remember that contrarians are usually wrong.”
That in itself doesn’t justify tossing Thiel from the Facebook board. Yet it’s proper to think harder about what a corporate board is expected to do.
To begin with, Zuckerberg’s bow to the principle of “diversity” at his company is a joke. There’s no real diversity in Facebook’s management; its shareholding are under the unassailable control of Mark Zuckerberg, who owns less than 15% of all company shares but 76.4% of its class B shares, which carry 10 votes per share. That gives him 53.8% of total shareholder votes, according to the most recent proxy. At the company’s annual meeting in June, shareholders agreed to create a third class of stock, which will allow Zuckerberg to donate much of his shareholding to charity without ceding voting control.
The Facebook directors, then, really serve as nothing but office decor at Facebook headquarters. Zuckerberg can talk all he likes about how the individual board members, who include venture investor Marc Andreessen, the banker and political figure Erskine Bowles and Facebook’s highly regarded chief operating officer, Sheryl Sandberg, are there to contribute their vast experience in their fields to his decision-making. But none of them owns voting power of even 1%, or any genuine authority. If Zuckerberg wanted their advice, he could ask them and wouldn’t need to pay them the more than $350,000 they each receive in cash and stock for serving.
They’re on the board to project a certain image for Facebook—technically savvy, public-spirited and yes, diverse. What image, then, does Peter Thiel project for the company? He’s expressed publicly a distaste for social and political inclusiveness—too bad that welfare recipients and women must have a voice in governance. He’s taken a hostile stance against the free expression of ideas, by hounding into near-extinction a new organization whose actions, which were legal, he didn’t like.
Then there’s his association with Trump. Zuckerberg asserts that “there are many reasons a person might support Trump that do not involve racism, sexism, xenophobia, or accepting sexual assault.” That’s true, but it doesn’t obscure the fact that the person Thiel is supporting is a retailer of racism, sexism, xenophobia, and brags about sexual assault. Regardless of whether Thiel likes Trump because of his claims to support “smaller government” and “a different tax policy,” those other elements are inextricable parts of Trump’s character. Trump’s temperament and policies, which include violent hostility to a free press, are inimical to the role Facebook wishes to play as a social medium and information service.
By defending Thiel’s relationship with Trump as merely an affiliation with a political viewpoint, Zuckerberg is associating his company with the most noxious and extreme features of national politics. The same goes for Y Combinator. Not even every Republican has stood up for Trump (and more would probably speak out against him if they weren’t making a political calculation of their own). How can these companies decide that this is just politics?
It may be that Zuckerberg genuinely feels that Thiel brings something to the boardroom that’s of real value to Facebook. He shouldn’t be forced to dump Thiel from his board (not that he could be). But he needs to give the matter more thought, and make a more compelling argument. To say that a billionaire has a right to serve Facebook in the name of “diversity,” or that keeping Thiel around somehow empowers the rest of us to “share our experiences” and “understand each other” and “connect...a little closer together” is too asinine for words.