Where is it all going wrong for Elon Musk? - Business Leader News

Where is it all going wrong for Elon Musk?

The price of ongoing poor corporate governance at Tesla continues to be seen in many quarters as the small price worth paying in exchange for Elon Musk’s leadership, ambition, innovation and execution.

Musk is viewed as a visionary thinker and full of entrepreneurial flair, which has allowed him to be portrayed as a unique CEO, who willfully defies the corporate governance shackles that restrict and guide other less gifted or innovative leaders.

His ongoing defiance in the face of his legally binding settlement agreement with the SEC, Tesla’s nonchalant attitude to hefty fines, up to $20m each, or Musk’s opposition to Tesla’s Senior Executive Communications Policy and their supervising, senior, in-house Telsa lawyer (Designated Securities Counsel) tasked to pre-vet and approve his tweets.

However, according to corporate governance expert Gerry Brown, far from being the exception to the rule of powerful and effective corporate governance, in fact Musk is emblematic of the perils of the decision-making autonomy and the scandals that necessarily flow from light-touch supervision and regulation of CEO’s by executive boards on both sides of the Atlantic.

Brown commented: “Far from being an aberration, I would argue that Elon Musk can be pilloried for his eccentricity but not for honest almost rigid adherence to the current loose-cannon norms and standard of contemporary CEO leadership practice. While many other CEOs might appear much more measured, benign, consultative and authoritative while they loudly sing stirring verses from the corporate governance hymnbook, their decision-making and actions are often equally without effective oversight by chairmen, non-exec directors and shareholders alike. And, worse still, in results terms they are often much more damaging to their businesses too.

“Without even thinking too hard about businesses making the news during the last month or so for the wrong reasons, unforced errors from reputedly safe-handed CEOs abound – for example – at Metro Bank, Crossrail, Persimmon and Patisserie Valerie. All these took place centre stage in the apparent full glare of the checks and balances of diligent supervision and/or self-regulation. None of these upsets were in the best interests of the shareholders, government, customers or the general public.

“Judged by either his results or strategic business decision making, despite his notional flamboyance, Musk still looks the safer bet at work (albeit much less so outside it). Fun at Musk’s expense disguises the deeper problem around the corporate governance of all our CEOs and business leaders by executive boards in the UK. Clearly our corporate governance regulatory environment is sufficiently broken to require urgent repair rather than further showboating and tinkering.”