Facebook’s Civil Rights Audit teams that are at least one-third diverse (meaning racial or ethnic minorities, women, people with disabilities, or members of the LGBT community). Facebook’s outside counsel agreements also require that diverse team members be given meaningful roles and responsibilities, such as being the day-to-day contact with Facebook, leading presentations, or having a speaking role at court hearings. In 2019, Facebook launched an annual survey of its top 40 law firms (by spend) it engages as outside counsel to evaluate the firms’ performance in meeting these diversity requirements. Facebook celebrated the firm with the highest score and is directing all firms, especially low-scoring firms to improve. (Facebook has indicated that penalties, including cancellation of outside counsel contracts, were not imposed but may be imposed in the future should firms persist in failing to meet expectations for diversity.) In addition to these diversity commitments, Facebook is starting to build partnerships with law firms to promote greater diversity in the legal profession through programs designed to provide greater opportunities for law students from diverse backgrounds. In the Auditors’ opinion, Facebook has demonstrated less progress on the financial management side. Facebook has faced strong criticism from the civil rights community (and members of Congress) regarding the lack of diversity of its asset managers and financial services providers. During testimony before the House Financial Services Committee in 2019, Mark Zuckerberg was grilled about Facebook’s asset management and whether sufficient attention has been paid to the diversity of Facebook’s asset management firms. Of the 10 investment management firms Facebook works with, one is self-identified (but not certified) as female owned, and none are minority-owned. Facebook states that its engagements with financial institutions center around capital markets activities (share repurchases) and investment management. The company notes that in 2020, it hired a diverse firm to execute share repurchases on their behalf. Facebook also engaged a diverse consulting firm to conduct a search for diverse investment managers capable of meeting the company’s needs. Facebook indicates that the results of this search are being used to develop an RFP, with the intent to hire qualified vendors. 6. Auditors’ Observations Facebook has made important progress in some areas, especially its vendor diversity program. But, it can and should do more. Its efforts to expand construction-related contracting with diverse-owned companies is a step in the right direction. Given that millions of businesses use Facebook products and services, Facebook could also do more to enable diverse-owned companies to be identified and surfaced through Facebook’s products to provide more visibility for those seeking to partnership with diverse-owned companies. With respect to outside counsel engagements, including updating its contracts to require diverse representation and meaningful participation are positive, affirmative steps. The Auditors encourage Facebook to continue to explore ways to give those words meaning by ensuring that firms that fall short of these obligations are held accountable. On the financial management side, Facebook should redouble its efforts to engage with more diverse companies. While Facebook states that many of its financial needs are limited and therefore do not result in significant financial gains for asset management firms, engaging with diverse institutions can have positive impacts that are not reducible or limited to brokerage fees earned. 71