VEA Vice Chair Nell Minow is quoted in the Washington Post story about the stunning stock drop at Facebook.
“Facebook, its reputation and the people who work in it have been pretty battered over the past year,” said Nell Minow, vice chair of the corporate governance consulting firm ValueEdge Advisors. “And so this is just one more mud pie in the face.”
The money Facebook lost in one day amounts to more than the enter market capitalizations of some of America’s largest companies. Or another way to look at it, it’s more than the GDP of entire nations…
In the world of corporate governance, Minow said, companies are encouraged to align the interests of their employees, executives and shareholders, including by having employees own stock….
“So the downside of that, quite literally, is that when something like this happens, they start panicking about their net worth rather than paying attention to what’s going on at the office,” she said.Minow noted that much of the consumer mistrust in Facebook stems not just from Thursday’s stock drop, but from a longer-term cynicism about the company’s trustworthiness “as a provider of information and as a seller of its own personal information.”
“They’ve begun to address it with some rebranding,” Minow said. “But that’s a big mountain to climb.”