{"id":377385,"date":"2021-12-07T04:48:00","date_gmt":"2021-12-07T01:48:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/fa-center-twitter-made-this-shareholder-friendly-move-after-jack-dorsey-resigned-as-ceo-heres-why-it-just-might-work\/"},"modified":"2021-12-07T04:48:00","modified_gmt":"2021-12-07T01:48:00","slug":"fa-center-twitter-made-this-shareholder-friendly-move-after-jack-dorsey-resigned-as-ceo-heres-why-it-just-might-work","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/fa-center-twitter-made-this-shareholder-friendly-move-after-jack-dorsey-resigned-as-ceo-heres-why-it-just-might-work\/","title":{"rendered":"#FA Center: Twitter made this shareholder-friendly move after Jack Dorsey resigned as CEO. Here\u2019s why it just might work."},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3f8f83dbff2\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3f8f83dbff2\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/fa-center-twitter-made-this-shareholder-friendly-move-after-jack-dorsey-resigned-as-ceo-heres-why-it-just-might-work\/#Firms_typically_see_their_stock_do_well_when_they_appoint_a_CEO_from_inside_the_company\" >Firms typically see their stock do well when they appoint a CEO from inside the company.<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/fa-center-twitter-made-this-shareholder-friendly-move-after-jack-dorsey-resigned-as-ceo-heres-why-it-just-might-work\/#The_importance_of_culture\" >The importance of culture<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/fa-center-twitter-made-this-shareholder-friendly-move-after-jack-dorsey-resigned-as-ceo-heres-why-it-just-might-work\/#No_guarantees\" >No guarantees<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/fa-center-twitter-made-this-shareholder-friendly-move-after-jack-dorsey-resigned-as-ceo-heres-why-it-just-might-work\/#Mark_Hulbert\" >Mark Hulbert<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#FA Center: <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Twitter<\/a> made this shareholder-friendly move after Jack Dorsey resigned as CEO. Here\u2019s why it just might work.<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Firms_typically_see_their_stock_do_well_when_they_appoint_a_CEO_from_inside_the_company\"><\/span>\n  Firms typically see their stock do well when they appoint a CEO from inside the company.<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\" role=\"region\" aria-label=\"article body\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000511191\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000511191\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Twitter<br \/>\n        TWTR,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/203180645\/composite\" class=\"positive\">+5.70%<\/bg-quote><br \/>\n       investors may be making a mistake by reacting so negatively to Jack Dorsey\u2019s resignation as CEO and his being replaced by a relatively unknown company insider \u2014 Parag Agrawal.<\/p>\n<p> The chart below plots Twitter stock\u2019s performance relative to the S&amp;P 500<br \/>\n        SPX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210599714\/realtime\" class=\"positive\">+1.17%<\/bg-quote><br \/>\n       since Dorsey\u2019s resignation announcement on the morning of Nov. 29. Since then the stock has lagged the S&amp;P 500. Barron\u2019s quoted a money manager as attributing this lagging performance to \u201cdis<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ointment from Wall Street that an internal successor was chosen\u201d instead of a high-profile outsider.<\/p>\n<div class=\"paywall\">\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:67.28571428571428%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-445836?width=540&amp;size=1.4849187935034802 540w, https:\/\/images.mktw.net\/im-445836?width=620&amp;size=1.4849187935034802 620w, https:\/\/images.mktw.net\/im-445836?width=639&amp;size=1.4849187935034802 639w, https:\/\/images.mktw.net\/im-445836?width=700&amp;size=1.4849187935034802 700w, https:\/\/images.mktw.net\/im-445836?width=700&amp;size=1.4849187935034802&amp;pixel_ratio=1.5 1050w, https:\/\/images.mktw.net\/im-445836?width=700&amp;size=1.4849187935034802&amp;pixel_ratio=2 1400w, https:\/\/images.mktw.net\/im-445836?width=700&amp;size=1.4849187935034802&amp;pixel_ratio=3 2100w\" sizes=\"(max-width: 639px) 100vw, (max-width: 979px) 620px, (max-width: 1299px) 540px, 700px\" src=\"https:\/\/images.mktw.net\/im-445836?width=700&amp;height=471\" alt=\"\" title=\"\">\n      <\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\">\n      <\/figcaption><\/figure>\n<\/p><\/div>\n<p>       My suggestion to Wall Street: Read academic research about the importance of the CEO for an organization\u2019s long-term success. My reading of these studies suggests that Wall Street actually should be celebrating that Twitter\u2019s board chose an insider. CEOs who come in from the outside often do a poorer job than lesser-known managers who have worked their way up through the ranks of the corporations they eventually lead \u2014 like Agrawal.<\/p>\n<p>This is because a corporation\u2019s internal culture plays a much bigger role in a company\u2019s success or failure than the CEO. Internal candidates like Agrawal are steeped in Twitter\u2019s corporate culture and know how to navigate it. In contrast, CEOs brought in from the outside have no such familiarity, which is why they often are less-effective leaders.<\/p>\n<p>To be sure, a board of directors might want to bring in an outsider in order to change a firm\u2019s internal culture. Unfortunately, in a contest between an outsider CEO and an internal culture, the latter usually wins. <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/www.hbs.edu\/faculty\/Pages\/profile.aspx?facId=552003\" class=\"icon none\">Gautam Mukunda<\/a>, a professor of organizational behavior at Harvard Business School, has found from his research that \u201cmost of the CEOs who try to radically transform a company will fail.\u201d<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetPullQuote\n            inline\n    scope-web|mobileapps\n  article__inset\n          article__inset--type-InsetPullQuote\n            article__inset--inline\n  \"><\/p>\n<div class=\"wsj-article-pullquote article__inset__pullquote \">\n<p class=\"pullquote-content article__inset__pullquote__quote\">\n        <span class=\"l-qt article__inset__pullquote__mark--left\">\u201c<\/span>\u2018Wall Street exaggerates the importance of the CEO.\u2019<span class=\"r-qt article__inset__pullquote__mark--right\">\u201d<\/span><\/p><\/div>\n<\/p><\/div>\n<\/p>\n<p> The implication is that Wall Street exaggerates the importance of the CEO. <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/www.hbs.edu\/faculty\/Pages\/profile.aspx?facId=6921\" class=\"icon none\">Rakesh Khurana<\/a>, a colleague of Mukunda\u2019s at Harvard Business School who is a professor of leadership development, told me on the occasion of past CEO shakeups that \u201clarge-scale statistical studies have failed to find any direct causal link between CEOs and firm performance.\u201d A corporation\u2019s internal culture \u201cexerts a far greater longer-term influence on the company\u2019s success\u201d than a CEO.\u00a0<\/p>\n<h6><span class=\"ez-toc-section\" id=\"The_importance_of_culture\"><\/span><strong>The importance of culture<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>What is this corporate culture that plays such a predominant role? It\u2019s not easily defined, which is one reason why Wall Street doesn\u2019t pay it as much attention as it deserves. A partial list of what corporate culture includes was provided by a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nber.org\/papers\/w29322\" class=\"icon none\">recent study by three finance professors: Gary Gorton and Alexander Zentefis (both at Yale) and Jill Grennan (at Duke)<\/a>:<\/p>\n<ul class=\"articleList\">\n<li>\n      Unwritten codes, implicit rules, and regularities in interactions<\/p>\n<\/li>\n<li>\n      Identities, self-image, and guiding purpose<\/p>\n<\/li>\n<li>\n      Espoused values and evolving norms of behavior<\/p>\n<\/li>\n<li>\n      Conventions, customs, and traditions<\/p>\n<\/li>\n<li>\n      Symbols, signs, rituals, and group celebrations<\/p>\n<\/li>\n<li>\n      Knowledge, discourse, emergent understanding, doctrine, ideology<\/p>\n<\/li>\n<li>\n      Memes, jokes, style, and shared meaning<\/p>\n<\/li>\n<li>\n      Shared mental models, expectations, and linguistic paradigms<\/p>\n<\/li>\n<\/ul>\n<p>You can readily see why culture isn\u2019t easily defined. But just because it\u2019s hard to define doesn\u2019t mean that it has little or no impact.<\/p>\n<p>An example of how big an impact culture has arises when two companies merge, either through an outright merger or an acquisition. Many studies over the years have documented that the average merger destroys value, when taking into account the market valuation of both companies and comparing them to otherwise similar companies that don\u2019t merge. The likely culprit, according to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.hbs.edu\/faculty\/Pages\/item.aspx?num=37946\" class=\"icon none\">Eric Van den Steen<\/a>, a professor of business administration at Harvard Business School, is a \u201cculture clash \u2014 the\u2026 destructive effects of combining two organizations with different cultures.\u201d<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<h6><span class=\"ez-toc-section\" id=\"No_guarantees\"><\/span><strong>No guarantees<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>To state the obvious, picking an internal candidate to be CEO is not a guarantee of success. So there is no assurance that Twitter will perform well under its new CEO.<\/p>\n<p>Just think back to the disappointing performance of <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">General<\/a> Electric<br \/>\n        GE,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/208495069\/composite\" class=\"positive\">+3.49%<\/bg-quote><br \/>\n       stock when Jeff Immelt was CEO. Immelt had been working for GE for 19 years when he was appointed CEO. During his tenure, GE stock lagged the S&amp;P 500 by more than six percentage points annualized.<\/p>\n<p>Still, my reading of the research suggests that GE is more the exception than the rule. Twitter has a better chance of success by naming an insider as CEO than it would have had it catered to short-sighted Wall Street investors and appointed a higher-profile outsider.<\/p>\n<p><em>Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>letters that pay a flat fee to be audited. He can be reached at <\/em><em>mark@hulbertratings.com<\/em><\/p>\n<p><strong>More:<\/strong> Why GE\u2019s tax-free split could power the stock higher and reward patient investors<\/p>\n<p><strong>Also read: <\/strong>The Nasdaq and the Dow are now trading in a way that was evident just before the internet bubble burst<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Mark Hulbert\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/topics\/journalists\/mark-hulbert\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/MktwHulbert\",\"text\":\"@MktwHulbert\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:contributors@marketwatch.com\",\"text\":\"contributors@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Mark_Hulbert\"><\/span>Mark Hulbert<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-77CC-D7DB147AB3F3%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#FA Center: Twitter made this shareholder-friendly move after Jack Dorsey resigned as CEO. Here\u2019s why it just might work.&#8221; Firms typically see their stock do well when they appoint a CEO from inside the company. Twitter TWTR, +5.70% investors may be making a mistake by reacting so negatively to Jack Dorsey\u2019s resignation as CEO and&#8230;<\/p>\n","protected":false},"author":1,"featured_media":377386,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-442911\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-377385","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/377385","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=377385"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/377385\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/377386"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=377385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=377385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=377385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}