A CEO is just an employee, paid by the shareholders to do the job shareholders want him to do. Usually, the job is "get us rich". The CEO can do a lot of things regarding the company direction, but it has to match the shareholders goals.
Generally, if it doesn't make profit short term or long term, it is unacceptable, and here, Jack Dorsey essentially wants to kill Twitter as a company, so of course he can't do that. For the same reason I won't let the mechanic I hired to maintain my car destroy it instead just because he thinks my car is bad for the environment or something. He may be right, but it is not what I paid him for. And if I discover he actually destroyed my car, not only he won't get paid, but there are good chances I will sue him.
A CEO is not “just an employee”, even when they are not a founder. You don’t get to accept that much power and that much money and then pass off any responsibility because you have someone to answer to.
Like really, if we accept that proposition how would society function? Youd have people in charge of tens to hundreds of thousands of peoples daily lives and output who just pass the buck on any issues because they got orders? Is that in anyway functionality different from a monarchy?
That seems like an uncharitable interpretation of what the OP wrote. Obviously, employees have varying degrees of power in any given company, not just the CEO. A team lead, a director, a middle manager, and so on all have varying degrees of power within an organization (at least on paper; we can speak of influence that isn't formalized). The point the OP was making is that because CEOs are ultimately employees, the same basic relevant "rules" or expectations apply to them by virtue of their employee relationship. That doesn't automatically excuse them of any wrongdoing. All employees share some responsibility and some culpability (though this part is more complex) in a company's operations. Indeed, CEOs are generally more responsible for the company's direction than any other employee, and they must assent to what the shareholders are asking them to do.
(Also, you've unfairly maligned monarchies. Monarchies are not by their nature despotic, though they can be as can other forms of government. And if you want to make the analogy, then most companies are closer to monarchies than to democratic republics in the sense that at most companies, you don't have a say in who is CEO, for example.)
> Like really, if we accept that proposition how would society function? Youd have people in charge of tens to hundreds of thousands of peoples daily lives and output who just pass the buck on any issues because they got orders? Is that in anyway functionality different from a monarchy?
1) Exactly as it does. You're looking at it.
2) Yeah, that's pretty much how it's going. Like, half the time they pass the buck even when there's no-one "above" them and they were the originator of all the orders, and somehow that seems to work out much better for them than one might hope. Did you see that last presidency the US just had?
3) More like feudal aristocracy in general, not just a monarchy, except that the serfs get to pick which of several bad lords they'll serve, but you're on the right track.
Welcome to the first steps toward left-libertarianism.
Huh? No recognizing and being uncomfortable with this stuff is that step toward left-libertarianism. Not endorsing it. Guess I didn't make that clear enough.
I will retract my criticism. Admittedly after dealing with the Mises Caucus I got sensitive to comments on left libertarianism. Thank you for the clarification
Maybe there is something to the dual class structure where the founder retains control while financing the operation. It was always taught in business school as bad corporate governance, but empowering the founder has upside too and may even be positive in the long run.
Board members have a legal duty to act in the best interest of the shareholders (except for B-corps). If he wrote an email that said "I know it will make us less or no money, but we should turn Twitter into a decentralized protocol," and then the share price dropped, shareholders could sue him.
That's right, CEO needs to focus on those quarterly numbers. For example, Apple should never have let that phone operation cannibalize their perfectly good music player business. Total mistake to let a CEO have that much control and "vision."
This is a strawman because no one has claimed that a CEO must focus on short-term shareholder profit.
The point is that the CEO works for the owners of the company. (In a publicly traded company that's typically shareholders represented by a board.) To keep their job the CEO just needs to be able to convince the owner(s) that they're making the right decisions.
In the case of Apple, most owners (shareholders) trusted Steve Jobs' decision to cannibalize existing product lines with new ones.
In the case of Twitter, I am skeptical that the owners would have trusted Jack enough to let him transition Twitter to an open protocol without some kind of long-term monetization plan.
No it isn't. The claim is "A CEO is just an employee, paid by the shareholders to do the job shareholders want him to do." That claim lets four words, "the job chareholders want," work pretty hard. Could mean anything. Could be "run great shareholder meetings with lots of swag" or it could mean "do something that we can't imagine ourselves because otherwise we'd do it instead of investing here."
In TFA Dorsey briefly describes his vision of what to do after taking Twitter private. He is speaking to who would become the effective owners. In the car repair analogy it is as if a rental van was in a fender bender. The rental co can get it fixed with a normal bodyshop or has an option to sell it.
Down the street there is a body shop with a vision. The owner of that shop knows a lady who wants to wants to start a food van and is telling her, "I know a dinged rental van you can get at a discount and when we finish conversion it will look better than new."
When you (sarcastically?) said "That's right, CEO needs to focus on those quarterly numbers" it seemed like you were implying that this was someone's argument.
As no one is making this argument, it's rather hard to continue the discussion past that point but I will try. I agree that the CEO can actively seek out new owners that more closely match the CEO's vision, but even then they are working for the existing owners (who must agree to sell) until it is sold, at which point they will be working for the new owners.
I don't think this argument is in good faith. Generally, a CEO does need to focus on the fundamentals of a company. Answering to investors ultimately means answering to a group of individuals or who are more or less interested in the long-term outlook of a company. The stock price is a function of future cash flows (or is when the market is rational), and I find it hard to believe that people don't expect some sort of innovation/R&D investment to protect and maintain those cash flows.
> Answering to investors ultimately means answering to a group of individuals or who are more or less interested in the long-term outlook of a company.
Said no-one ever about public exchange investors. Why do you think Michael Dell had to take Dell private to restructure it? Jobs had more latitude since Apple was "90 days from bankrupcy" when he returned.
Michael Dell has the won the battle for control of the computer company that he created, after shareholders backed his $24.8bn (£15.7bn) offer to take Dell private and revive the struggling business away from the incessant pressure of Wall Street.
Generally, if it doesn't make profit short term or long term, it is unacceptable, and here, Jack Dorsey essentially wants to kill Twitter as a company, so of course he can't do that. For the same reason I won't let the mechanic I hired to maintain my car destroy it instead just because he thinks my car is bad for the environment or something. He may be right, but it is not what I paid him for. And if I discover he actually destroyed my car, not only he won't get paid, but there are good chances I will sue him.