Driving Tesla

Well, this comes as no surprise: Tesla shareholders have written to the board asking that chief executive Elon Musk commit to a 40-hour week at, yes, you’ve guessed it, Tesla.

The Financial Times reports a letter from pension funds has asked that the CEO does a proper working week saying it “highlights how the billionaire’s polarising position in US politics has made some asset managers more outspoken in challenging him”.

The letter accuses the board of appearing “largely uninterested and unwilling to act in the best interest of all Tesla shareholders by demanding Musk’s full-time attention on Tesla”.

You may remember that Tesla sales have fallen dramatically in many jurisdictions following Musk’s deep involvement in the Donald Trump White House and attempting to influence foreign elections.

Anyway, what the board, chaired by Robyn Denholm, has so far said to Musk is anybody’s guess but she may get more time with the entrepreneur after his departure from White House service this week. Whether it’s enough to reverse the decline in Tesla’s sales is, also, anybody’s guess.

Parent company

Board Agenda is happy to report that male directors are to be ever more enlightened. Researchers Onur Kemal Tosun, Cardiff Business School, and Ylva Baeckstrom, of King’s College London, looked at the impact of shared parental leave (SPL) on male directors and firm performance.

And it seems there is a positive link. The duo looked at data from almost two thousand UK firms after shared parental leave was introduced in 2015.

They find that after SPL became a thing, male directors improved their firm’s performance and companies have better governance.

They conclude: “The connection between SPL and improved corporate governance arises from these issues being debated more rigorously at board level, with increased accountability then placed on the senior leadership team.” Metro males making a difference in the boardroom. At last.

A place in the toolkit

Now over to the a perennial governance favourite: dual class shares. Are they good, are they just abusive? Prof Pierluigi Matera and legal eagle David Berger have tried to work it all out, once and for all.

Their observation is that dual-class governance tends to be standardised, not crafted from scratch each time there’s an IPO. And shareholders don’t complain, they go with it.

So what’s going on? “The data shows that investors are not ideological,” write Berger and Matera. “They reward results, not just governance checklists. If dual-class structures help companies outperform, innovate and remain mission-driven, then they deserve a place in the modern corporate governance toolkit.

“As such, regulatory and scholarly efforts should shift from enforcing structural orthodoxy to fostering governance frameworks that support long-term performance and entrepreneurial vision.”

That we suspect, is a view some shareholders will struggle with.