San Francisco: Tesla Inc. has appointed Robyn Denholm to be chairman of the board of directors, after a run-in with securities regulators cost Elon Musk the position he had held since leading the electric carmaker’s first funding round 14 years ago.

Denholm will preside over Tesla’s board effective immediately and will leave her role as CFO and head of strategy at Telstra, the Australian telecommunications company, once her six-month notice period with Telstra is complete.

Stepping down from the role of chair was a condition of the accord Musk reached with the Securities and Exchange Commission in September to settle fraud charges related to his tweets on taking the company private. Musk will still remain on the board as a director.

Denholm has served on Tesla’s board since 2014.

“I believe in this company, I believe in its mission and I look forward to helping Elon and the Tesla team achieve sustainable profitability and drive long-term shareholder value," Denholm said.

“Robyn has extensive experience in both the tech and auto industries, and she has made significant contributions as a Tesla Board member over the past four years in helping us become a profitable company," said Musk. “I look forward to working even more closely with Robyn as we continue accelerating the advent of sustainable energy."

It’s the end of an era for Musk, 47, who became chairman when he led a $7.5 million initial investment in the company in April 2004. While he’ll remain chief executive officer, fallout from Musk’s posts in which he claimed to have secured the funding and investor support to buy out investors at $420 a share will last for years to come.

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

Directors also will create a permanent committee to ensure implementation of the terms of the SEC settlement, which include setting up procedures and controls to oversee Musk’s communications -- including his tweets. Tesla will have to employ or designate a securities lawyer to review messages that senior officers send through Twitter and other social media.

Tesla’s nine-member board, which includes Musk’s brother Kimbal, has long come under fire from corporate governance experts for lacking independence and being comprised of Musk loyalists. Several are investors in or directors at SpaceX. SpaceX is the closely held rocket company that Musk also runs, including Steve Jurvetson. He’s been on a leave of absence since accusations of misconduct spurred his resignation a year ago from the venture capital firm he co-founded.

Also read: Elon Musk wanted to impress girlfriend with $420 price: SEC

A union-affiliated investor group and officials representing major pension funds in four states have called on Tesla to go beyond the terms of the SEC settlement to fix its corporate governance issues. The group wrote in a letter to three Tesla independent directors last week calling for the creation and release of a plan to refresh the board and for timelines to be set for some members to leave.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Close