Tesla (NASDAQ:TSLA) Must Hire a New Chairman in a Month
Tesla’s new Chairman will need to demonstrate the ability to manage founder/CEO Elon Musk
The Big Q: What are the traits that will make a great Chairman of Tesla?
Whoever replaces Elon Musk will need to have a combination of leadership skills and work experience. Mr. Musk has agreed to step down from the Chairman role as part of the $40-M settlement with the US Securities and Exchange Commission (SEC) after facing charges of misleading investors by Tweeting that he had “funding secured” to take Tesla private at 420/share.
He will remain as CEO and retain a seat on the company’s board, but he is barred from the Chairman role for 3 years. The SEC deal calls for the appointment of new Chairman and 2 additional independent directors to the board.
1. Independence: The new chairman needs to maintain a level of independence from Mr. Musk that is hard to find on Tesla’s existing very friendly board, as only 3 of 9 board members have no connections to or investments in companies controlled by Mr. Musk, Some institutional investors believe the current board has failed to rein in Mr. Musk. His Tweet Storming attracted the SEC charges in the 1st place. He even taunted and mocked the SEC on Twitter last week.
2. Managerial Strength: The new chairman will have to have a strong managerial track record that the board can expect to help put Tesla on the path to profitability. The company is experiencing significant delays in delivering M3 vehicles, even turning to loyal Tesla customers last month to serve as volunteers in delivery centers to help clear the logistics logjam.
3. Regulatory Expertise: Tesla will need to find 1 who not only has manufacturing experience but has also dealt with regulators in previous positions. The SEC will keep a close eye on Telsa and Mr. Musk for the foreseeable future, Tesla will also need to work with transportation regulators as the company strives to put self-driving cars on the road. Whoever accepts the Top spot on the board will need to be able to navigate those regulatory issues deftly.
Tesla’s settlement with the SEC has not yet been approved. A US district judge will review the settlement briefs on 11 October.
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