The executive chairman of Twitter Inc. (NYSE: TWTR), Omid Kordestani, is largely to blame for the company’s share price. He and the board picked CEO Jack Dorsey and have continued to support him as disaster after disaster have ruined the company.
Twitter’s eight other board members are equally to blame. They include Peter Fenton, who has been on the board since 2009; Hugh Johnston, who became a board member this year; Martha Lane Fox, who joined in 2016 as well; Debra L. Lee, who joined this year; David Rosenblatt, who has been a board member since 2010; Marjorie Scardino; Bret Taylor, who joined this year; and Evan Williams, on the board since 2007 and a Twitter founder.
The board is stacked with new members and one who helped start the company. That is not a very favorable combination for shareholders.
There is a temptation among new board members to keep quiet and not rock the boat until they have learned more about the company. It does not take long to learn that its stock price has dropped 50% in a year, or that it dropped another 10% after the company announced earnings. It does not take a longer period of education to realize that the Twitter user base is not growing, nor that revenue moved up only 20% to $605 million in the second quarter.
The board must know that Dorsey was the wrong selection as chief executive officer. He is not a turnaround expert or a gifted marketer.
Twitter’s runway to prove it is viable, standalone business is very short. If it fails in an attempt to reinvent itself, the board will be very much at fault. That is why it owes shareholders a change of management, if only to take a failed CEO and replace him with one who has more promise.
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