Tesla, which has been criticized by some investors for a lack of independent directors, has added two new directors — both with extensive media experience — to its six-member board.
The new board members are Linda Johnson Rice, CEO of Ebony Media Operations and chairwoman of Johnson Publishing Company, and James Murdoch, CEO of 21st Century Fox.
The two new board members were added a few months after Tesla confirmed it was seeking additional independent directors without ties to CEO and founder Elon Musk, Tech Crunch reported.
Prior to the two new additions, a group of Tesla investors including the California State Teachers’ Retirement System wrote a letter to Tesla in April asking for two new independent board members to be added who have no direct ties to Musk.
The announcement follows Twitter’s move in May toward diversifying its board. Twitter added Debra Lee, the CEO of BET, to its board. Lee’s appointment is significant because she is a black woman joining a board that has been mostly composed of white men, Recode reported. Twitter created a new board membership for Lee rather than replace an outgoing board member.
In April, Twitter CEO Jack Dorsey promised to make additional appointments that would diversify the board.
More additions to the board soon, ones that will bring diversity and represent the strong communities on Twitter. This matters & is a must.
— jack (@jack) April 8, 2016
Lee joined BET, now owned by Viacom, in 1986 and worked her way up, landing the top job in 2006.
Johnson Rice returned this year as CEO to Ebony, the Chicago-based magazine empire once owned by her family, Chicago Tribune reported. She served as chairwoman emeritus of Ebony since its 2016 sale to Austin-based private equity firm CVG Group, formerly known as Clear View Group.
Johnson Rice’s father, John Johnson, started the iconic African-American publication in 1945. The monthly lifestyle magazine has documented the African-American experience since it first hit the newsstands.
In addition to heading Ebony and Johnson Publishing Company, Johnson Rice heads Fashion Fair Cosmetics and is chairwoman emeritus of Ebony Media Holdings, the parent company for the Ebony and Jet brands. She has extensive corporate board experience, having served on the boards of a Bausch & Lomb, Continental Bank, Quaker Oats, Dial Corporation, MoneyGram and Kimberly-Clark Corporation, and currently serving on the boards of Omnicom Group and Grubhub. She is a trustee at the Art Institute of Chicago, president of the Chicago Public Library board of directors, council member of the Smithsonian’s National Museum of African American History and Culture, and board member of After School Matters and Northwestern Memorial Corporation.
James Murdoch is the younger son of media mogul Rupert Murdoch, whose media empire includes the Wall Street Journal. Before becoming CEO of 21CF in 2015, James was News Corp’s Europe and Asia CEO. He claims to have an “instrumental” role in 21st Century Fox’s “decade-long leadership on environmental sustainability,” according to his Tesla board member bio.
Until now, Tesla’s board included six directors including five with personal or professional ties to Musk, TechCrunch reported.
Musk said he had been planning to announce two new independent board members ever since Tesla acquired SolarCity, a solar power company founded by Musk’s cousins. Musk said in a tweet in April that the shareholder group had “nothing to do” with the decision to appoint these directors.
This investor group should buy Ford stock. Their governance is amazing …
— Elon Musk (@elonmusk) April 12, 2017
Besides, I already said we'd add more independent members during SCTY merger. Will announce soon, but this group has nothing to do with it.
— Elon Musk (@elonmusk) April 12, 2017
CtW Investment Group, which works with union-based pension funds and holds 200,000 shares of Tesla, demanded that Tesla take steps to remedy it “underlying governance deficiencies,” Reuters reported:
In addition to adding two permanent independent directors and separating the chairman and CEO roles, CtW called for two independent directors to form a special committee to review the proposed SolarCity deal; a declassification of the board so that stockholders may have an annual say on the election of all directors; and revision of the corporate governance guidelines to forbid that immediate family members of board members serve concurrently on the board.
