New Tesla chair­woman’s big­gest chal­lenge is con­trol­ling Musk

Daily Sabah (Turkey) - - Business -

AUS­TRALIAN telecom­mu­ni­ca­tions ex­ec­u­tive Robyn Den­holm brings much-needed fi­nan­cial and auto in­dus­try ex­per­tise to her new role as Tesla’s board chair­woman, but her big­gest chal­lenge is whether she can rein in a CEO with a pro­cliv­ity for mis­be­hav­ior. Den­holm, who has been a Tesla board mem­ber for nearly five years, was named to the post late Wed­nes­day, re­plac­ing Elon Musk as part of a se­cu­ri­ties fraud set­tle­ment with U.S. gov­ern­ment reg­u­la­tors. Cor­po­rate gov­er­nance ex­perts say they would have pre­ferred an out­sider with man­u­fac­tur­ing ex­per­tise be ap­pointed to lead the board, now dom­i­nated by peo­ple with per­sonal and fi­nan­cial ties to Musk, in­clud­ing his brother.

They aren’t sure if Den­holm was hired just to pla­cate the Se­cu­ri­ties and Ex­change Com­mis­sion to com­ply with the set­tle­ment or whether she’ll ac­tu­ally be able to cor­ral the vi­sion­ary but er­ratic Musk, who re­mains CEO.

“With all the crazy stuff go­ing on, she was there,” said Ro­han Wil­liamson, a fi­nance pro­fes­sor who stud­ies cor­po­rate gov­er­nance at Georgetown Univer­sity’s McDonough School of Busi­ness. “She couldn’t con­trol him be­fore. Is any­thing go­ing to change?”

Den­holm, 55, is chief fi­nan­cial of­fi­cer and strat­egy head at Tel­stra Corp. Ltd., Aus­tralia’s largest telecom­mu­ni­ca­tions com­pany. Her new role at Tesla came largely be­cause of the board’s fail­ure to con­trol Musk, es­pe­cially when he made a sur­prise an­nounce­ment over Twit­ter in Au­gust that fund­ing was se­cured to take Tesla pri­vate at $420 per share.

That drove up Tesla’s stock price and hurt short-sell­ers, in­vestors who bet against the com­pany’s suc­cess. Even­tu­ally it drew a law­suit from the SEC al­leg­ing that Musk mis­led in­vestors.

Charles El­son, di­rec­tor of the cor­po­rate gov­er­nance cen­ter at the Univer­sity of Delaware, said Tesla should have brought in some­one from out­side. No mat­ter how talented Den­holm may be, and even though she ap­pears to have fewer ties to Musk than other directors, 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.”

Mak­ing Den­holm a full-time chair also cre­ates gov­er­nance prob­lems be­cause she could be­come a Tesla ex­ec­u­tive, blur­ring her role as an in­de­pen­dent check on man­age­ment, El­son said. On Twit­ter Thurs­day morn­ing, Musk wrote that he has great re­spect for Den­holm. “Very much look for­ward to work­ing to­gether,” he wrote.

In a state­ment, Den­holm said she be­lieves in Tesla and looks for­ward to help­ing Musk and the com­pany “achieve sus­tain­able prof­itabil­ity and drive long-term share­holder value.”

Robyn Den­holm

Newspapers in English

Newspapers from Turkey

© PressReader. All rights reserved.