Elliot Management is moving to acquire Board seats at Twitter. CEO Jack Dorsey would have done well to have followed our December 2017 advice offered in the TEK2day article: “Distracted CEOs and CEO Overreach.”
Our position has always been that CEOs have a fiduciary responsibility to shareholders in that they owe 100% of their focus to the job. Dorsey is guilty of splitting his loyalties between two public company CEO jobs – social media platform Twitter (tkr: TWTR) and FinTech platform Square (tkr: SQ). It would seem that Dorsey’s loyalty favors Square given his planned move to Africa sometime in 2020 for a period of up to six months and given his equity stake in each company:
There is a strategic rationale here given that Africa is a payments hotbed and getting ahead of the digital currency curve in Africa may serve Square and its shareholders well over the long-term.
Our advice to Mr. Dorsey would be to relinquish the CEO title at Twitter and Square while remaining Chairman at Square. This would provide Mr. Dorsey air cover and enable him to explore payments-related opportunities in Africa unencumbered by the daily responsibilities of running a public company. Given that Elliott Management is now involved, someone else may make Mr. Dorsey’s decision for him.