Mark Zuckerberg's majority control over Facebook gives too much power to one person and may deter potential investors, a corporate-governance experts says.
The CEO, who owns 28.4 per cent of Facebook, the largest single stake, has 56.9 per cent of voting power, the company said yesterday in its prospectus. He can also name a successor if he still controls the company at the time of his death.
The 27-year-old has retained authority over strategy - even after adding business veterans to the board, including venture capitalist Marc Andreessen.
Zuckerberg's control means directors and shareholders will have less sway over the company's direction, according to Charles Elson, a University of Delaware corporate-governance professor.
"The public has no say in the control of the board, which in my view is terribly harmful to any notion of accountability," he said. "It's very troubling to investors, and it's a bad bet for them."