What are the traits that will make a great chairman of Tesla?
Whoever replaces Elon Musk will need to have a unique combination of leadership skills and work experience. Musk agreed to step down from the chairman role as part of his settlement with the U.S. Securities and Exchange Commission after facing charges of misleading investors by tweeting that he had "funding secured" to take Tesla private at $420 per share. He will remain as CEO and retain a seat on the board, but he's barred from the chairman role for three years. The SEC deal calls for the appointment of new chairperson and two additional directors to the board.
Here are the three things Tesla will look for in Musk's replacement, as noted by Bloomberg.
The new chairperson needs to maintain a level of independence from Musk that is hard to find on Tesla's existing board, as only three of nine board members have no connections to or investments in companies controlled by Musk, Bloomberg reports. Some institutional investors believe the current board has failed to rein in Musk, particularly his Twitter habit, which attracted the SEC charges in the first place. Musk even taunted the SEC on Twitter as recently as last week.
2. Managerial muscle
The new chairperson will also need to have a strong managerial track record that the board can expect to help put Tesla on the path to profitability, Bloomberg reports. The company is experiencing significant delays in delivering Model 3 vehicles, even turning to loyal Tesla customers last month to serve as volunteers in delivery centers to help move things along.
3. Regulatory expertise
Ideally, Tesla will find a candidate who not only has manufacturing experience but has also dealt with regulators in previous positions, according to Bloomberg. While the SEC is likely to keep a close eye on Telsa and 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 lands the top spot on the board will need to be able to navigate those regulatory issues.
Tesla's settlement with the SEC has not yet been approved. A U.S. district judge will review the settlement on October 11.