I applaud this decision: PayPal’s board is thinking like owners, putting investors first before losing trust and activists coming in to bring about change.

PayPal went public in 2002 and became independent from eBay since 2015. Over the past five years, it has experienced an approximately 86% share price decline, while Stripes, Goodbye, Blockand Square increased.

There’s a lot more to play with here. PayPal is ranked 137 in the S&P 500 and is in a strong market. The real-time payment transactions space will grow to approximately $38.6 billion by 2025, with a 43% CAGR forecast from 2026–2030 and long-term projections of 3x volume growth between now and 2030.

The average Fortune 500 CEO tenure will decrease from 7.7 years in 2024 to 6.8 years in the first half of 2025. Shorter tenured CEOs are more affected by negative quarterly performance, increasing the probability of termination by 34%, according to studies.

Recent past

PayPal’s CEO Alex Chriss joined in 3Q23 and managed to reduce the stock price by 25%–30%, compared to Stripe, its biggest competitor, which grew the fastest payment volume and revenue, with merchant partners in the ecosystem. Shopify and Fiserv posting double-digit growth.

Stripe’s revenue is estimated at just under $20 billion. Stripe will process $1.4 trillion between 2023–2024 (~40% YoY growth), compared to PayPal’s ~$30 billion in revenue, with growth slowing over the past three years from high single digits to mid single digits. PayPal’s core branded online checkout growth slowed to 1%, raising board concerns.

Today’s speed of dynamic innovation, along with newly deployed macro trends such as “agent commerce,” require even faster decisions. Five to six quarters is enough time to determine if a new strategy is working. PayPal has lost its mojo. Unfortunately Chriss hasn’t been able to reverse the multiyear decline in the share price, which is down nearly 80% from five years ago.

Most of the boards would have waited a long time

PayPal’s board sees what’s going on and focuses on the company’s results compared to peers through an outward-facing lens. All boards can learn from this example of outside market focus and centralization.

This change needs to happen now to stop the slide and retain talent and teams. Boards must recognize the need to intercept a crisis before it fully manifests. The universal takeaway for boards: it never gets better on its own. If you have five quarters of consistently declining results, it’s time to act.

Today’s exponential change environment requires faster decision-making and advanced technology deployment, such as agentic commerce, to keep pace with new payments companies.

The board acknowledged that the company was a beneficiary of strong macro tailwinds. PayPal’s drastic share loss can only be attributed to product gaps and/or management implementation. There are no excuses tied to external headwinds or exogenous factors — such as tariffs, regulatory pressure, or geopolitical issues — affecting the fundamental real-time payment sector. PayPal should have the “right to win” once product and implementation challenges are met.

The key lesson to be learned for boards is to scrutinize your company carefully if it is not a good peer.

There can be only a few major factors. Boards must have the courage to conduct a transparent evaluation:

• Is the product a laggard?
• Is market growth slowing?
• Has the market changed fundamentally?
• Or is it execution and go-to-market strategy?
• Is it the CEO’s strategy and leadership ability?

It is always one of the great few:

• product
• market
• killing
• Leadership

High-functioning boards engage in frank dialogue, make sound business judgment calls, and take action.

All boards need to take into account the courage and bravery required to deal with succession decisions before additional value is destroyed. The opportunity to rebuild the confidence horizon of investors lies ahead.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of luck.