Oil barons and technology hipsters seem very different. But they share a dark side. The chief executive of US explorer SandRidge Energy and some of his peers jet around at shareholders’ expense, while at Facebook and Google founder-bosses are insulated from owners by super-voting rights. Clubby boards also feature in both sectors.
The US oil and gas industry plumbs the depths of weak corporate governance and social responsibility, with 15 companies getting the worst F grade from consultancy GMI Ratings – far more than would be suggested by their weighting in the sample. Headline-grabbing offenders include Chesapeake Energy and SandRidge, whose founder Tom Ward kitted out the business with four corporate jets despite the fact that its wells are mostly within driving distance. Meanwhile James “Jim Bob” Moffett, chairman of Freeport-McMoRan Copper & Gold, recently engineered the purchase of McMoRan Exploration, which he runs and partly owns, for a whopping premium. Gold-plated CEO pay and perks also feature, along with generous remuneration for incurious directors. Silicon Valley’s governance shortcomings aren’t so brash. Only a few tech companies are branded with GMI’s failing grade.
Still by the consultancy’s count 41 of their number, including such leading lights as Facebook, Google and LinkedIn, have opted for multiple share classes that help bosses outvote other investors – a higher incidence than the average in GMI’s sample. Facebook’s Mark Zuckerberg holds just a fifth of the company’s stock but thanks to supervoting shares and other arrangements he commands over half of all shareholder votes.

