Insights Preslav Tonkov

The part-time CEO

Aristotle’s golden mean is a philosophical principle which suggests that the right course of action in a given situation is always the middle way between two extremes. For example, too much or too little courage is not good, one must find a balance.

This week, Twitter CEO Jack Dorsey was accused of not being able to find the Aristotelean balance between his two competing leadership roles. Dorsey has a dual mandate: he spends the morning running the social network and in the afternoon retreats to Square, a payments company he founded in 2010. His working day is split down the middle, but there’s no doubt where his priorities lie. His stake in the digital payments giant is worth north of $5 billion, ten times the value of his holding in Twitter.

As a result of his dual responsibilities and perceived lack of focus, Elliott Management, a hedge fund, has taken a stake in Twitter in an effort to replace the company’s co-founder as chief executive, nominating four individuals to stand for election to the social network’s board. The powerful investor privately submitted nominees for Twitter’s board of directors. Elliott would prefer a full time chief executive to replace Mr Dorsey, people briefed on the matter told the Financial Times.

However,  the Twitter co-founder signalled on Thursday that he intended to remain at the helm of both companies. “I have enough flexibility in my schedule to focus on the most important things and I have a good sense of what is critical in both companies,” he told the Morgan Stanley conference in San Francisco.

The crux of the issue appears to be Dorsey’s decision to spend 6 months of year in Africa away from his responsibilities in Silicon Valley. The modern CEO is often seen as having the ability to juggle multiple roles. Elon Musk and Jeff Bezos are two good examples but neither of them can be considered as part-time CEOs.

While Dorsey was not directly questioned about Elliott’s demands, Mr Dorsey said he was “re-evaluating” plans to go to Africa, citing “everything happening in the world, particularly with coronavirus”.

In recent years, the idea of reducing the working week has certainly gathered attention. For example, Adam Grant, a psychologist from the Wharton School in Pennsylvania, has argued that “we have some good experiments showing that if you reduce work hours, people are able to focus their attention more effectively, they end up producing just as much”.

John Maynard Keynes famously predicted in 1930 that his grandchildren would work a 15-hour week as material necessities are adequately met and people begin to divert more time towards other activities. Dorsey certainly has the opportunity to this, but he chooses to spend his free time building another billion-dollar company.

However, when it comes to CEOs of publicly traded companies, do the same rules apply? Perhaps, they would if the performance of the company matched the expectations of its financial backers. Twitter’s boss does not enjoy this luxury as the company has chronically failed to match Facebook’s formidable advertising machine.

Ultimately, this situation is symbolic of the contemporary zeitgeist. While cuddly capitalism which offers flexible working and sleeping pods appears to be the new normal, this is only tolerated when the economic output remains stable. Shareholders, not stakeholders, still make the rules.