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    Assigning New Tesla Chair is a Little Step, Bigger Steps are Needed - Scholar

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    Robyn Denholm has taken Tesla founder Elon Musk's place as chair of the company's board. Radio Sputnik discussed the designation with Charles M. Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.

    Sputnik: What does the designation of Denholm as Chair of Tesla's Board mean for the company?

    Charles M. Elson: I think certainly bringing in someone other than Musk as chair of the board is a positive. This isn't someone who is a relative let's say of Musk and appears on the surface to be independent of Musk and the company.

    I think the problem is that she has been on this board for four years and she's been there when all of the oversized issues developed; and as a member of the board she was viewed as not appropriately or effectively overseeing Musk. It's a little odd to have her chair the entity with the idea that this will create a better monitoring vehicle.

    I would have been much more comfortable I think and a lot of other people would've been had they gone outside to bring someone in.

    The other issue is that it looks like she is going to be a fulltime chair which begins to look a little bit like she is going into almost an executive role of the company, and if the board is there to oversee the management of the company, you want to be very careful that with board itself doesn't turn the chair, the board doesn't become management, getting back to the original problem there.

    READ MORE: Tesla Appoints Board Member Robyn Denholm to Replace Elon Musk

    It's a positive that they have a new chair, the problem there was with someone who was mining the store while the store wasn't being very effectively run.

    Sputnik: Well, I was just about to ask you actually, I mean there is a saying is she just going to be a lame dog for three years? Or she is just going to be at the head of the position but really she's going to be taking orders and strategic policy from the guy below, I mean is It just and ‘name-in' position only? Surely, for Ms. Denholm's withstanding I am sure she is a highly credible CFO and she has certainly added the value but is it just a name in position surely for three years, isn't it?

    Charles M. Elson: Well, that's the concern. You know and I think that everyone's concerned all along when FEC penalty was not having Musk leave all executive positions but you know creating a sort of a band-aid, if you will, on a situation.

    Again, had they gone outside and they will bring in two new independent directors I think that's a positive, I think they'd get. But I would have hoped and expected that one of those would have served as chair. You know, again you don't put someone in charge of getting you out of the woods who helped get you lost in the woods, to begin with, and I think that's the problem.

    Sputnik: It looks as there we are in for a good share growth period in the next sort of 12 months. Can you foresee any sort of major change in sort of cultural strategy given this lady has now become the head or very much as what we've just been alluding to?

    Charles M. Elson: Well, it is still Musk's show. The tweets continued as you know, after the settlement, tweet attacking the FEC, tweet about Israel the company. So, you know, it doesn't appear as though awful a lot has changed, I mean you're really banking everything on Musk.

    I think, you know when you judge a company as we all know, judging it by a quarter is not the end all of end all's, and I think the question is Musk as he has operated this business has been quite successful but there had been some things have drawn lots of concern now that she has to try to stop this and move around so much.

    So, I think that the question is ultimately is he in his present frame of mind, present state of life, the most effective take it forward or not. I think from a public disclosure, you know, a public company perspective, you wouldn't have seen this someone went through this sort of things thing; you know 20 million, 40 million FEC fine or something like this, and of which by the way that I am sure will be multiple security disputes to resolve all the whole thing. Survive this and you'll lead the company whether in chair role or in an executive role and in any other public company I wouldn't think they'd personally survive. It's puzzling why it continues to.

    READ MORE: Tesla CEO Elon Musk Calls US Regulator's Accusations of Fraud ‘Unjustified'

    There are some very bright people that are obviously talented in person, but given what's happened you can't stop wondering and I think this move forced upon them by the FEC is, I wouldn't call a sort of a false step forward. It's a little step but, you know, in this instance I think bigger steps are necessary.

    Views and opinions expressed in this article are those of the speaker and do not necessarily reflect those of Sputnik.

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    banking, Tesla Model 3, FEC, Tesla, Elon Musk, Robyn Denholm, US
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