One of our principles of engagement is to use a broad toolkit of strategies, including targeted escalation, utilising broader investor support, and use of shareholder resolutions, towards achieving our objectives. We also see that there is often a link between social and governance issues, as in the case of Meta Inc, formerly Facebook.
Earlier this year, Storebrand had raised its concerns with Meta, formerly Facebook, about the "metaverse" project and potential social and human rights risks that this may pose if these risks are not managed appropriately. Subsequently, Storebrand, in collaboration with Arjuna Capital, filed a shareholder resolution on the matter, which succeeded in being presented for voting at Meta's annual general meeting, despite being contested by the company's management. However, the resolution did not pass.
Lack of progress with shareholder resolutions, like this one, is essentially a governance issue. Support for such resolutions is significantly influenced by the dual class share structure of the company, which effectively allows the founding members of the company a disproportionate influence relative to other shareholders.
It is with this backdrop that Storebrand also earlier this year raised concerns about governance issues at Meta, including the dual class share structure that restricts the effective influence of shareholders; the need for an independent board chair and truly independent board directors to provide robust checks and balance on the company’s direction. Concerns were sent, in the form of a co-ordinated letter with other investors, outlining our key asks.
This quarter, the group of investors who sent the letter was invited to a meeting with one of the directors on the board, where the content of the letter was discussed, and requests and recommendations were raised by the investor group.