As Twitter, Square interests converge, CEO Dorsey risks conflicts

Wed Sep 30, 2015 8:47pm EDT
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By Yasmeen Abutaleb

SAN FRANCISCO (Reuters) - If Jack Dorsey becomes permanent CEO of both Twitter Inc (TWTR.N: Quote) and mobile payments company Square, he could struggle with conflicts of interest in the business that is key to both companies' futures: e-commerce.

Corporate governance experts and some investors have already expressed concern that Dorsey faced tough choices in his role as interim Twitter chief and head of Square.

That intensified on Wednesday after a report by technology news website Re/code that Dorsey is expected to be named permanent chief executive at Twitter as early as Thursday, while keeping his job at Square.

“The biggest conflict would simply be the allocation of his time,” Esther Dyson, an early Square investor who holds several board and advisory positions at tech companies, told Reuters in an email on Tuesday. “CEO is a full-time job.”

Neither company commented on the Re/code report.

Dorsey has acknowledged the risk of a conflict of interest, publicly saying he recuses himself from decisions involving both companies. Still, that leaves him out of discussions in a key area of growth.

Twitter has increased its payments and e-commerce options since Dorsey took the helm as acting Twitter chief on July 1.

Earlier this month, Twitter announced a partnership with Square that would enable users to make political donations directly through the site. And on Wednesday, Twitter said it was partnering with U.S. retailers to help them sell products through a "buy now" button in tweets, a feature that does not involve Square, and relies on potential rivals to Square's service.   Continued...

Jack Dorsey, chairman of Twitter and CEO of Square, listens to a fellow panelist during a Techonomy Detroit panel discussion held at Wayne State University in Detroit, Michigan September 17, 2013.    REUTERS/Rebecca Cook