Power Sheet – June 20, 2016

-The big event is of course Thursday’s Brexit vote. The outcome is anyone’s guess: Polling showed the Leave side gaining steadily until the murder of Labor MP Jo Cox last Thursday; now two new polls show Remain in the lead, but by slim margins. And remember that the pollsters mis-called last year’s U.K. Elections so badly that the British Polling Council conducted a year-long inquiry into what went wrong (short answer: unrepresentative samples).

Predictions of what a Leave victory would mean are similarly uncertain. Financial institutions and the Bank of England are braced for chaos, but players with much at stake have presumably hedged their exposure and otherwise prepared for that outcome. The most immediate effect would likely be on the stature of Prime Minister David Cameron and of former London mayor Boris Johnson, with Remain proponent Cameron facing pressure to step down as Tory leader and Leave proponent Johnson his obvious (but far from certain) successor.

In short, far more than usual just three days before a vote, we have no idea what will happen. At least we Americans won’t have to stay up quite all night for the result; we should know by 2 a.m. EDT unless it’s extremely close.

-Facebook today holds its annual meeting, at which shareholders will vote on the company’s proposal to issue a new class of stock. The reason is that founder and CEO Mark Zuckerberg wants to give away 99% of his stock over time, but he doesn’t want to give up control of the company. He now owns or holds voting power over 60% of the votes. The new shares would be non-voting, and those shares would be given away.

It’s obvious how this is a good deal for Zuckerberg but far from obvious how it’s good for other shareholders. An institutional owner, Northstar Asset Management of Boston, has placed an opposing proposal on the agenda of today’s meeting, calling for Facebook to have just one class of stock. Northstar CEO Julie Goodridge argues that “Non-insider shareholders already suffer with only one-tenth the voting power of insiders. Facebook’s new non-voting share of stock will completely eliminate any semblance of opportunity for meaningful engagement with the company.”

Since Zuckerberg casts 60% of the votes, the outcome is not in doubt. And to be clear, Zuckerberg is a brilliant founder and leader who deserves to be the billionaire he has become. But brilliant leaders obsessed with control work out great until they don’t, at which point they are a world of trouble. Just ask Sumner Redstone’s family and Viacom’s directors, executives, and shareholders.

-Last Monday, Utah Lieutenant Governor Spencer Cox spoke at a vigil for victims of the Orlando shooting, at which he apologized for behavior that the public knew nothing about. He introduced himself by saying, “I recognize fully that I am a balding, youngish, middle-aged, straight, white, male, Republican politician, with all of the expectations and privileges that come with those labels. I am probably not who you expected to hear from today.” He then said that his small rural high school included students who were gay, he now realizes, and “I regret not treating them with the kindness, dignity, and respect — the love — that they deserved. For that, I sincerely and humbly apologize.”

He didn’t have to say any of that, and he may even have damaged his political prospects. But he also created a lot of fans across the political spectrum, and think of the trust with which voters and others will hear him in the future. That’s the behavior of a good leader.

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