The Context
In January 2025, Meta terminated its core DEI programmes. The internal memo cited a “charged” legal landscape. The real trigger was a meeting between Mark Zuckerberg and Trump advisor Stephen Miller in late 2024, where Zuckerberg assured him of alignment with the incoming administration’s agenda. This was followed by a board realignment, replacing Sheryl Sandberg with a figure from a politically aligned sports league. The reversal was not a strategic pivot but a political capitulation.
The Risk
This is a textbook breach of a director’s duty to act in the best interests of the company under Section 131 of the Companies Act 1993. When a board allows core operational policies—like DEI, content moderation, and fact-checking—to be dictated by external political alignment rather than internal risk assessment and business strategy, it invites shareholder derivative actions. The contradictory public narratives (blaming Sandberg, then denying it) compound the governance failure, creating a reputational liability that erodes stakeholder trust. In New Zealand, a board that similarly reversed critical culture and safety policies for political reasons would be in direct breach of its duty of care, especially under the Health and Safety at Work Act 2015, which mandates managing psychosocial risks. The financial liability is not a theoretical fine; it’s the cost of defending a claim for breach of fiduciary duty and the catastrophic loss of market value from a shattered corporate reputation.
The Control
When was the last time our board formally assessed whether a major policy shift was driven by genuine business strategy versus external political or social pressure?
What specific, auditable data do we have that proves our stated corporate culture and values are insulated from the personal political affiliations of our senior leaders or major shareholders?
If we were accused of making a decision to appease a political figure, what contemporaneous board minutes and strategic papers could we produce to prove it was a bona fide business judgement?