Mark Zuckerberg risks 'hubris' over Facebook float

MARK ZUCKERBERG could fall victim to hubris after refusing to give up control of Facebook after it becomes a publicly owned company, according to shareholder group ISS. And his company has also attracted criticism for trying to minimise its tax bill as it seeks to compete with other tech giants.
 
Corporate governance firm ISS, which helps its clients make "informed investment decisions", criticised Facebook's proposed dual-class share structure in a report, saying it would limit the rights of shareholders and prevent change. But it admitted that its reservations would be unlikely to have much effect on the popularity of the company's shares.
 
When the social network announced its intention to go public it revealed that Zuckerberg would retain 57 per cent of voting rights on key decisions at the company.
 
"This is a governance profile with a defence against everything [except] hubris," sniffed ISS, according to The Daily Telegraph. It added that Facebook would have an "autocratic model of governance" that could leave it vulnerable to competitors who react more swiftly to the demands of their shareholders.
 
However, ISS admitted: "Even a strong distaste among institutional investors for the company's retrograde governance practices is unlikely to diminish the economic success of the IPO."
 
That is not the only problem Facebook faces as it prepares to go public. According to The Sunday Times, the website's IPO could undermine its anti-corporate credentials.
 
The paper claims that the company is now aping other tech giants like Google in trying to "sidestep the taxman" in order to maximise its profits and reduce its tax burden.
 
"Like it or not, profit is racing up Zuckerberg’s agenda," says the paper. "But the higher it goes, the greater is the risk the 27-year-old will destroy the very thing that attracted users in the first place: Facebook’s defiantly anti-corporate credentials." ·