While the future of Activision Blizzard's (ATVI +0.00%) management isn't up to its investors, the recent allegations surrounding CEO Bobby Kotick have raised significant controversy and concern among both the public and shareholders. In this segment of Backstage Pass, recorded on Nov. 19, Motley Fool contributors Toby Bordelon, Rachel Warren, and Nicholas Rossolillo exchange ideas about a possible successor.
Toby Bordelon: We spent a lot of time in the last segment, the last hour talking about CEO Bobby Kotick, embattled CEO, still embattled, not former yet, but you know what, we're not going to talk about him, let's leave him aside.
Let's set the stage. Let's assume, Rachel, Nick, one member of the Board come to you on Monday or Tuesday and says, you know what, totally unrelated to anything that's going on, our CEO has decided to take up fishing and he's stepping down. [laughs]
We want you to give us suggestions as to who's in the new CEO should be. Who do you think would be good to run this company? Who do you think would be a great CEO of Activision Blizzard? What do you think, Rachel, I'll start with you. Who do you think will be a good CEO.
Rachel Warren: Obviously, this is coming from my little imaginary world here because I have no idea what's going to happen. But I thought this was an interesting question. I think that anyone that's in part of Activision Blizzard's current management, might be under a lot of scrutiny, but it's also possible that one of those individuals might end up running the company if in fact Mr. Kotick could does step down.
One person that caught my attention was someone actually mentioned briefly at the end of the last hour, and that is Frances Townsend. She's right now the Executive VP for Corporate Affairs. She has a very long history working in company leadership, and back in the mid-2000's, she was actually an Assistant for Homeland Security and Counterterrorism in the Bush administration.
Activision Blizzard has been facing a lawsuit from the state of California for what the state alleged has been "a culture of constant sexual harassment", and Townsend particularly faced calls to resign and actually stepped down from the company's women's network after she basically send out an email in response to this lawsuit, rebutting the key points from the state of California.
But as part of the Wall Street Journal's investigation, they are alleging that in fact it was not Thompson who wrote this email, [laughs] that it was Kotick and that blamed her, which this has never happened before. [laughs]
If in fact that's true, then a lot of the heat she's been facing would have in fact been wrongfully misdirected and perhaps she could in fact take the reins. I don't know. Again, just prognosticating here, but I thought that was an interesting little bit from the Wall Street Journal's investigation.
Toby Bordelon: What about you, Nick, any thoughts here?
Nick Rossolillo: This is a hard question, Timothy. It was hard for me not because obviously they need to a culture change at Activision Blizzard, that's obvious. But I just don't know a lot of names like executive leadership names out there, but I immediately thought of, I feel like the established video game industry could be missing out on the opportunity with this whole metaverse thing in the coming years.
Roblox has I think laid that bare. People want interactive 3D environments where they can go out and create their own play experience. I immediately thought, what better place to tap some storytelling leadership experience than Disney, and specifically, Lucasfilm has a lot of female leadership. Kathleen Kennedy is also a controversial figure among Star Wars fans, but she's tied up for another few years, but there's a Lynwen Brennan who's right under Kathleen Kennedy has been there for a long time.
Lots of experience creating cinematic universes and producing creative content, I think that would be a brilliant opportunity for a video game company like Activision Blizzard to try to get some of that world creation expertise involved in the video game making process instead of this constant, put out a video game, title, traditional business model. That's what I thought of.
Toby Bordelon: That's very interesting thought. I think, ultimately, a company like this, like Activision, you need someone who can run the business and keep things reigned in but let your creatives do what they do, let your studio heads and your game creators do what they do.
Someone who is a top executive basically can have that experience of keeping things on schedule reigned in and structured, but letting the show runners and letting the directors do what they do with the product. That's an interesting choice.
I think one thing you might do, maybe try to get Jennifer Oneal back, the former co-head of Blizzard who was made co-head after the old head resigned in the wake of these issues. Try to get her back. She said she is leaving at the end of the year. I don't know if she would.
I think maybe her response would be, "I got plans that don't involve you," which is fair, I can respect that because life is short and you can't see everything. That would be interesting to me. It would be interesting just to even try to get her back maybe.
Also, I got to think, maybe Sheryl Sandberg, maybe she wants to be a CEO. You think about what she's done with her Lean In organization. I think she's got some experience in dealing with some cultural issues. When you think about the whole tech grow like culture.
She's in that world, she's in Silicon Valley and she's thrived in it. Maybe she have some experience in trying to bring that investors administration, she could thrive there too and try to rein some of this in and get it to where it needs to be.
I also think her role as COO of Facebook has her in that experience of, look, you've got to keep things, you've got to keep some financial discipline here, you've got to keep some operational discipline, but then you got a lot of people do what they do best and really let their creativity thrive in the organization.
We've seen Facebook's success, she's been a big part of that. I would love to see her be CEO at some point. I think maybe it's a good shot. I don't know, we're just throwing names out here. Activision board taking into advisement, as you will. [laughs] We'll see what happens here.
