Tesla names new board chair in settlement with regulators
DETROIT (AP) — Tesla’s board has named one of its own as chairman to replace Elon Musk, complying with terms of a fraud settlement with U.S. securities regulators.
The electric car and solar panel company’s board on Thursday named Australian telecommunications executive Robyn Denholm as chairman, effective immediately.
Denholm will step down as chief financial officer and strategy head at Telstra, Australia’s largest telecommunications company, after a six-month notice period. She’ll work full-time at Tesla, where she has served on the board since 2014.
Musk will remain as Tesla’s chief executive as part of the settlement deal with the U.S. Securities and Exchange Commission. The U.S. agency filed a lawsuit alleging that Musk duped investors in August with misleading statements on Twitter about securing the funding to take Tesla private.
The move vaults Denholm, 55, from relative obscurity into a high-profile position of trying to rein in Musk and manage a company that is struggling to produce vehicles and make money as it attempts to shift the world from fueling transportation with oil to battery-powered electric vehicles.
“I believe in this company. I believe in its mission and I look forward to helping Elon and the Tesla team achieve sustainable profitability and drive long-term shareholder value,” Denholm said in a statement.
Critics of Tesla’s board have said members lack independence and are too closely allied with Musk, many through financial deals. Musk’s brother, Kimbal, is one of the members.
Although Denholm appears to have fewer ties to Musk than other directors, she still was on the board through numerous cases of bizarre behavior by Musk, including his surprise tweet to take Tesla private, smoking what looked like marijuana during a YouTube interview, and labeling a British diver a pedophile in a dispute over the rescue of Thai youth soccer players who were trapped in a cave.
A corporate governance expert questioned whether Denholm is the right person for the job, given that she was a member of Tesla’s board for four years yet failed to rein in the visionary yet erratic Musk.
“She was there while all of this was going on,” said Charles Elson, director of the corporate governance center at the University of Delaware. “Do you ask the person who helped get you lost in the woods to help drive you out of the woods?”
Elson said the company should have brought in someone from outside to be chairman, and that no matter how talented Denholm may be, she has a shadow over her of being on the board that did little as Musk misbehaved. “You really have got to wonder,” he said. “No other CEO of any other public company would have survived this.”