What Twitter's Board Really Needs
Twitter needs more diversity on its board.
But adding a woman won't necessarily do the trick.
Twitter, the social superstar that will go public soon, is in the crosshairs for what is perceived as a lack of diversity on its board because it doesn't list a single woman as a director. What's more, Twitter only has one female in a senior-level executive position.
That prompted a testy Twitter exchange between CEO Dick Costolo and oft-quoted academic Vivek Wadhwa, who criticized Twitter in an article in The New York Times. It also led to calls that Twitter immediately fix this supposed gender imbalance by putting a woman on the board. Right now. Or, at least before it goes public.
Such demands miss the point. Twitter needs diversity on its board, but not in the way you might think.
First, it helps to know who is on the board. Costolo has a seat, as do Twitter co-founders Jack Dorsey and Evan Williams. Then there's Peter Fenton of venture firm Benchmark Capital, former DoubleClick CEO David Rosenblatt, and former Netscape executive Peter Currie. Rounding out the group is former News Corp. president Peter Chernin. (Full disclosure: I worked for Chernin when I was director of business news at FOX News.)
This is no doubt a qualified board: Chernin obviously knows media, and Rosenblatt, given his DoubleClick tenure, can certainly help Twitter build on its monetization strategy. Currie is a respected manager of tech companies, as well.
But, truth is, all the other members could go and it wouldn't have an impact. Dorsey and Williams founded the company, but they have new companies to manage now: Dorsey runs Square, while Williams is CEO of Medium. Their minds are on startups, not on governing a public company.
Fenton is a giant in the venture world, but Twitter is leaving that behind. The connections Fenton could bring are now less important.
What Twitter needs is more diversification of experience, and in two ways:
First, it needs to find more overseas board members. Twitter's growth potential is in monetizing its foreign audience. It's estimated that roughly 75 percent of Twitter users come from international markets, though only 25 percent of revenue does. As the Times noted, in the second quarter of this year, each American user represented about $2.17 in ad revenue to Twitter, contrasted with 30 cents for a user outside the U.S.
Put aside that Twitter's board is made up of white men. It is made up of American white men. Clearly, a director who can help shape a workable international strategy is needed. Running a company that does business overseas doesn't cut it. You need someone who has run an overseas business. A little foreign accent would spice up the corporate conversation.
Second, it would help if Twitter went down the economic ladder a bit. Twitter has a large urban-dwelling audience, second only to Facebook, according to data from the Pew Center. Blacks and Latinos are more likely to use Twitter than other social networks. Taking Facebook out of the mix, Pew found Twitter was more popular than other networks for users making less than $50,000 a year.
That's a huge opportunity. Put aside that Twitter's board is made up of white men. Now, also put aside that it is made up of American white men. It is made up of American white men who don't live in cities – the "inner" kind, since I'm sure they have their share of pieds-a-terre. Finding someone who knows the urban, black or Hispanic markets, and how to increase the yield there, will be vital for Twitter's growth. Here, the board falls short.
Would it be nice if Twitter could kill two birds with one stone by getting a woman who brought those two knowledge bases? Sure. But the decision has to made by what the business demands of the company. Miley Cyrus is a rich, successful woman. She would also make an insufficient (though admittedly entertaining) steward of the company's corporate governance. It isn't about the woman, but what a woman would bring to the table.
In the end, it is up to the board itself in a free market to govern itself. Twitter needs help and needs a better, more diverse board. But, despite the pressure from the outside for gender or racial parity, the directors should be mindful that not all equality is created equal.