Tesla CEO Elon Musk Resigns As Chairman – Here’s How His Role Could Change

resign

To settle charges of fraud brought by the U.S. over claims, Elon Musk made, saying he’d take his company private and he will step down as Tesla chairman. Both Musk and Tesla will each pay a $20 million fine as a part of Musk’s settlement and he can stay on as CEO the SEC announced this Saturday. It becomes important to understand the differences between the roles of both the positions.

As a CEO one makes a company’s top decisions and is the public face of a company. This position is primarily responsible for the company’s commitment to its internal and external stakeholders and the overall performance. Former P&G CEO Lafley writes that the CEO shapes its balances and values the investments the company makes in both the future and the present, decides which business the company is and isn’t in.

Chief executives spend 25 percent of their time building relationships and speaking to others found in a study tracking CEO time from two Harvard researchers, 16 percent on organization and culture, 25 percent on business and functional unit reviews and 21 percent on business strategy.

Musk may regain control of his company’s daily operations and focus less on shareholder demands after dedicating himself solely to being Tesla’s CEO. Unusual for a CEO, Musk, to help Tesla through its manufacturing sprints, has been known to put himself on the production line who is a typical leader. 

On the other hand, management expert Stanislav Shekshnia writes in Harvard Business Review, a company board chairman usually works on supervising and counselling a company’s management team and at the same time who’s responsible for the other board members.

For the last 14 years Musk has served as a Tesla board chairman and several shareholders have made a request to the carmaker to add independent board directors to provide a critical check on possible dysfunctional group dynamics without any association to Musk. Musk himself should be replaced by an independent director shareholder Jing Zhao said because double duty of Musk was more appropriate in the company’s early days. The company said that during the pressure time the board leadership needs to be close to the operations of the company.

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