But in reality any CEO is at the whim of the board, and if Elon owns > 51% of the voting shares, that's true no matter who holds any nominal title.
That means that he's visible in the office (because bye-bye remote work), and when there are product/technical questions, it's unclear to employees whether Elon or Linda is the ultimate decider. It's normally not a problem that the board can fire the CEO, because employees never interact with the board and often don't know who they are. But when the chairman of the board is also an ordinary employee, some fraction of employees will follow the official reporting structure and do what the CEO wants, while some other fraction of employees will follow the "power behind the throne" and do what Elon wants. The result will be a company that can't agree what it's doing, with multiple competing groups working at cross purposes.
This was a huge problem at Google, both in the early days and today. Larry and Sergey would go directly to engineers with ideas, and then those engineers (hoping to get a coveted Founder's Award, and out of respect for the founders) would drop what they were doing and work on Larry's ideas. It worked in the 2000s, because Larry & Sergey's product judgment actually was really good - that's how we got GMail, and Chrome, and YouTube, and Android. But it's also the root cause of much of the organizational dysfunction that affects Google today. Google culture follows competence, not reporting lines, which means that one giant company is actually 1000+ small groups of unrelated projects, most of which duplicate each other, that never integrate quite right, which will often be technically brilliant but then blocked or unlaunched as soon as they cross some competing executive's path.
Linda, because she is the one who is there every day. If Linda thinks Elon has made the wrong call, she just has to work out how to talk him out of it while soothing his ego, and in the meantime get her team to focus on how to implement the right one. She probably already has that skill, but if she needs mentoring, Gwynne Shotwell can help her out
That sounds exactly like the Twitter I've known for nearly twenty years.
In this structure, Elon is embedded in the decision making loop directly. The CEO normally is responsible for the company, but instead, Elon has decided that the CEO will deal with making money while he makes all of the decisions as to how the product works. Which essentially cuts the CEO of of any decision making aside from business partnerships, making her more of a VP of Sales than CEO.
If the issue is the advertisers need someone to escalate too (and someone who Elon would listen to when he needs talking out of some half baked idea), then it is a good fit.
If the idea is to have Twitter actually functional as a product driven engineering company, then yeah that won’t work. But baby steps.
They all want to be CROs (Chief Revenue Officer) now.
It is actually extremely common for corporations which aren’t regular business as such - for example, trustees of family trusts are commonly corporations with a single director who is the person who ultimately controls the trust. Also a common structure for sole proprietorship businesses that want some protection from legal liability.
I own a company which never has done anything (I was daydreaming). Its board of directors has one member-me. Legally, I am required to hold annual board meetings with myself, although I believe the legal obligation is met if I hold them in my head. “This year’s financial results: zero revenue, zero expenses, zero assets, zero liabilities, zero employees-another great year at does-nothing-corp!”
Otherwise, it’s easier to pierce the veil.
I once worked for a small Corp that the office manager was the board secretary and literally had a meeting with just herself for such a purpose.
I'm guessing what you actually mean is "Also a common structure for one person who does business on their own, who has incorporated, and who is their own sole board member." Is my inference correct?
[https://find-and-update.company-information.service.gov.uk/c...]
Interestingly, they're overdue on their bill with Companies House it looks like. Oops.
Lots of entities in Delaware named Twitter Inc. (3) plus what might be a holding company or two. Hard to tell without more digging.
[https://icis.corp.delaware.gov/eCorp/EntitySearch/NameSearch...]
Small firms it is common to have a single person board of directors, where that single person is the 100% owner.
When private equity takes a large firm private, they’ll often appoint a board full of their own partners and consultants/advisers-if you own 20 different firms, you don’t want to deal with all their CEOs, you want a layer between the CEO and you-which is where the board helps.
100% subsidiaries (such as a large multinational firm’s local subsidiary in each country) commonly have multi-person boards of directors, with a handful of local senior staff on it (e.g. country director, head of local finance, HR and general counsel) - they usually all just rubber stamp whatever HQ wants, although occasionally they might refuse (e.g if local counsel insists HQ’s demands are illegal and complying with them would make the directors personally liable)
I should point out that in the traditional legal sense of the term, even US LLCs are corporations-it is just that people in the US have adopted some weird redefinition of “corporation” which excludes them. Under Australian law, a US LLC is a corporation, albeit a foreign one. Worldwide, I think most countries legal systems would reach the same conclusion
The British monarchy is a corporation (a corporation sole) - actually, a whole bunch of distinct single member corporations (the monarch), one for each Commonwealth realm, and also one for each Australian state and Canadian province - each called “the Crown in right of X”. Maybe that’s an example of a corporation without any directors, although one might (rather meaninglessly) claim the monarch is the sole director