Huge California Pension Fund Questions Facebook Governance Setup

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CalSTRS invested in Facebook from its funds on the private equity side and is likely to invest in the company's publicly traded shares, Hester-Amey said.

"No matter how brilliant you are, when you come to the public market -- not that we want to ever tell Zuckerberg or anyone like him how to run his company -- there should be some protection especially for long-term, patient money like CalSTRS," Hester-Amey said.

"So I think there should be some more respect for capital," she said.

Facebook has put up a series of defenses against proxy battles and unwanted takeover attempts, according to its filing with the U.S. Securities and Exchange Commission.

Under the governance provisions, Zuckerberg would remain in complete control of the company for the foreseeable future, so much so that the 27-year-old Harvard University dropout would even have the right to appoint his own successor before he dies.

"With a person that owns as much of the stock and the way he has set up the governance ... it will be very hard to influence him except if he's got some kind of a conscience," Hester-Amey said.

Facebook's corporate governance measures go against a decade-long trend of a move toward more shareholder-friendly corporate governance in the United States, prompted by institutional shareholders such as CalSTRS.

S&P 500 companies have been taking down classified boards, poison pills and other defenses over the years under pressure from institutional investors to have more shareholder-friendly governance rules.

For example, only about 24 percent of S&P 500 companies now have classified boards -- where only some of the directors come up for election every year -- down from 61 percent in 2002, according to FactSet SharkRepellent.