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Costolo Will Step Down From Board Once Twitter CEO Selection Complete

The plan has been in place since he left earlier this year.

Vjeran Pavic for Re/code

Former Twitter CEO Dick Costolo will step down from the board once the social communications company selects a new CEO, according to numerous sources.

Bloomberg reported yesterday that this could happen, and I vaguely referenced the move in a previous story on the machinations around the many leadership changes at Twitter now happening.

But the transition plan has been in place since Costolo gave up the CEO position in June, with him relinquishing his seat to the new CEO.

If I had to guess, Costolo — who has been taking a break since he left the company — is likely to start a new venture, given he has a long entrepreneurial history. (He could also join a venture firm, but then he’d have to dress badly.)

The Bloomberg story noted that the Costolo departure would be part of a larger board shake-up to diversify it and add more varied voices to the mix. Twitter added its first woman director, former publishing exec Marjorie Scardino, last year. Other directors include three of its former CEOs (co-founders Jack Dorsey and Evan Williams, as well as Costolo), a VC (Benchmark’s Peter Fenton) and several experienced operating execs (Peter Currie, Peter Chernin and David Rosenblatt).

This board shake-up seems likely, given all the uncertainty already surrounding the leadership of Twitter, although the time sink that a board seat has been requiring of late has probably been working the last nerve of many directors. And its board has come under increasing pressure by Wall Street to stabilize the company.

According to sources, the selection of a new CEO will likely take place by September, with Twitter sales head Adam Bain and Dorsey as the lead candidates. Under one scenario, Bain would become CEO with Dorsey and perhaps Williams as chief product advisers. Under another one, Dorsey would be CEO with Bain as COO and president and Williams as executive chairman.

But Dorsey is already CEO of payments company Square and sources there said he has indicated recently that he would remain its top leader. That could certainly change, since the Twitter board has made it publicly clear that any new CEO could not have another CEO job.

While all the focus has been on Twitter’s insiders as the likely candidates, Spencer Stuart has been hired to evaluate others outside the company. The most intriguing person I have heard that the board is interested in is Instagram’s Kevin Systrom, whose popular photo app was bought by Facebook several years ago. At the time, Twitter tried to buy Instagram too and was outplayed by Facebook founder and CEO Mark Zuckerberg in the acquisition race.

While the company’s leadership stakes have been sucking up all the oxygen, Twitter has been prepping the release of major product updates and launches, including its Project Lightning. Lightning is a timeline feature that allows users to more easily follow tweets around specific events regardless of whether or not they have an account.

Of course, there is always the possibility that this is all moot, if Twitter is bought by a larger company. While Google seems the most obvious of buyers, there are a myriad of reasons that seems less likely. Other acquirers might range from Facebook to Apple to SoftBank to Microsoft.

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