Like Musk, Tesla’s new chairman is not averse to taking a few risks
An independent director at the electric car giant, she should know the challenge ahead,
Tesla has named Robyn Denholm as its new chairman as part of its deal with Wall Street regulators following Elon Musk’s tweeted announcements that he was going to take the electric car company he founded private.
Investors have generally just shrugged at Musk’s provocative tweets taking potshots at critics and shorters of the company, labelling them the price to pay for being on board a company with such bold aims. But the US Securities and Exchange Commission didn’t agree. A tweet in September from Musk that he intended to take the business, in which he owns 20pc, private at $420 a share led to a fraud investigation.
Musk’s social media assertion that he had “funding secured” for such a deal – he didn’t – led to a settlement where he neither denied nor admitted fraud.
Both Musk and the company paid a separate $20m ($15m) penalty, and part of the deal was he step down as chairman of Tesla, to be replaced by an independent person. This, the SEC said, was “specifically designed to address the misconduct at issue by strengthening Tesla’s corporate governance and oversight to protect investors”.
Yesterday, the world found out who is charged with bringing the billionaire under control. Ms Denholm has been an independent director of Tesla for four years and presumably the 55-yearold knows the scale of the job she’s taking on, having in effect had a ringside seat at the Musk circus for the past few years. That inside knowledge will work well for her – she knows what Musk is like – and gives her an appreciation of the challenge ahead when she takes up the full-time role after serving out a six-month notice period as chief financial officer of Australian telecoms group Telstra.
However, although she was an independent at the company, having sat on the board for so long will inevitably raise eyebrows at just how independent she really is.
She must bear some of the responsibility for allowing Musk to run free for too long, including Tesla’s controversial acquisition of debt-laden sister company Solar City for $2.6bn in 2016. Denholm also chaired the remuneration committee that approved the bonus scheme that could land Musk almost $60bn if Tesla’s market value hit $650bn in a decade.
No doubt her appointment is within the terms of the SEC deal – which had given a Nov 13 deadline for an announcement – but many were expecting to see someone with fewer links to Tesla take the job. Tesla trumpeted chartered-accountant-by-training Denholm’s experience in both tech and automotive businesses as a key factor in her appointment. There’s no doubt about the tech background – her career over the past two decades has seen her take top finance and operations posts that include networks business Juniper and Sun Microsystems, as well as Telstra and Japanese carmaker Toyota. She’s also been named as one of Silicon Valley’s most influential women.
However, it was 22 years ago she left Toyota after a seven-year stint at the business Down Under. The car industry has gone through a lot of change since then and there’s more to come: an automotive axiom is that the industry is going to see more change in the next five years than it has in the past 100.
Although it’s improving, the automotive industry is notoriously male-dominated – questions are still asked about whether an executive is a “car guy”, or not, to decide whether they fit in. To have thrived in such an atmosphere 20 years ago, Denholm will have no doubt shown herself to be a good operator.
Her decision to quit her current post at Telstra just a month after taking it on shows her commitment to the electric car business. However, considering her director duties paid almost three times her day-job salary last year, it’s a shrewd move, especially when Telstra’s chief executive was facing tough questions about how his chief financial officer could juggle the demands of both roles.
Back in 2010, when she won a Women Worth Watching in business award, Denholm’s pen portrait gave several insights into her life and thinking. Aside from news that her first job was “pumping gas at the family petrol station”, she said that her career had taught her “a willingness to take risks opens doors in ways that you never thought possible”.
How much of a risk she is taking with the Tesla job remains to be seen.
Robyn Denholm, 55, will take up the role after a six-month notice period at Telstra