Is Your Board Compliant or Complacent? Facebook fine and recent court ruling highlight need for board oversight.

After a year-long investigation into Facebook's privacy missteps, the Federal Trade Commission levied an unprecedented $5 billion fine against the tech giant. In addition to this fine (which equates to about 59 days of operating expenses) the FTC is also requiring that Facebook augment its board with a dedicated privacy committee comprised of independent board members.

Due to the dual-class share system that gives Mark Zuckerberg, Facebook's cofounder, chairman and CEO, almost unchecked power and influence over the company, he can remove or add a new director without cause.

The FTC mandates, however, that Zuckerberg cannot remove someone from the new privacy committee without the support of two-thirds of investors who hold voting shares voting together as a single class; this limits Zuckerberg's ability to make a unilateral decision and requires he have significant support...