Tesla picks insider to replace Musk as chairman after turmoil

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  • Friday, 9 Nov 2018

SAN FRANCISCO: Tesla Inc chose Robyn Denholm to succeed Elon Musk as chairman of its board, putting an independent director into the position of contending with the carmaker’s mercurial chief executive officer following his run-ins with regulators and investors.

Denholm, 55 – one of two women on Tesla’s nine-member board – would assume the role of chairman effective immediately, Tesla said.

A director since 2014, she will leave her position as chief financial officer and head of strategy at Australian phone company Telstra Corp at the end of her six-month notice period.

The appointment marks the end of an era for Musk, 47, who became chairman when he led a US$7.5mil initial investment in Tesla in April 2004.

While Musk will remain CEO and a board director, the fallout from his Twitter posts – which started with a claim that he secured funding and support to buy out investors at US$420 a share – will last for years to come.

“While Denholm is technically an independent member of the board, she has been part of the Musk team for some time now and that suggests she will not be up to the task of checking Musk’s worst instincts,” said Stephen Diamond, a professor of law at Santa Clara University who specialises in corporate governance.

“And, of course, that was the whole point of the SEC settlement.”

Ceding the role of chair was a condition of the accord Musk reached with the US Securities and Exchange Commission in September to settle fraud charges related to his tweets on taking the company private.

In addition to agreeing to a three-year ban from serving as chair, Musk and Tesla agreed that the company would add two new independent directors to the board by late December. — Bloomberg

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