In less than a week after being invited to join Twitter’s board following his acquisition of over 9% stake in the social media platform, the world’s richest man, Elon Musk has turned down the offer. This was revealed in a tweet by the company’s CEO, Parag Agrawal in the early hours of Monday.
Elon has decided not to join our board. I sent a brief note to the company, sharing with you all here. pic.twitter.com/lfrXACavvk
— Parag Agrawal (@paraga) April 11, 2022
Mr. Agrawal in the tweet explained that the platform had disclosed on Tuesday that Musk would be joining its 11-man board for a tenure that would last until 2024 after a compulsory background check and formal acceptance. His appointment was to be effective from Saturday 9th of April but Musk turned down the offer on that same day.
Agrawal also mentioned that members of the board were expected to act in a fiduciary capacity and as such act in the company’s best interest. He also noted that the platform is open to input from its largest shareholder moving forward. In closing, he encouraged workers to stay focused and avoid distractions that the new events may stir.
What possibly influenced Musk’s decision
Musk had earlier signed an agreement restraining him from buying over 15% of Twitter’s shares as a board member and taking over the company. Following his decision not to join the board, he is freed from the said agreement and can now buy available stocks to add to his shares if he so wishes.
According to principles of corporate governance, board members are expected to function in a fiduciary capacity, joining the board will mean that the vocal billionaire with over 81 million followers will be restricted from airing his opinion about the company. He is known to throw jabs at the platform with his tweets. In a recent post, he suggested turning the firm’s headquarters in San Francisco into a shelter for the homeless as no one comes around.
Although there are no indications that Musk objects to a background check, analysts believe that billionaires would not like their activities to be scrutinized.
After it was announced that Musk will not be joining the board, the company’s stock suffered a 7% decline before the market opened on Monday. It had earlier risen 27% last week when news of Musk being the largest stakeholder was shared as reported by cryptomarketsbeat.