Taking back control: What boards can learn from Tesla
The recent return of Elon Musk to Tesla amid tumbling shareholder value and rumours the board was considering replacing him may signify the need for more boards to “take back control” from all-powerful CEOs whose actions can harm brand and shareholder value.
John Flint, partner at Clarke Willmott LLP and legal advisor to the Institute of Directors on governance issues and board disputes, says that there may be lessons to be learnt for UK boards from Tesla’s recent travails to safeguard companies’ reputations and long-term success.
John, a commercial disputes lawyer, says many UK firms, are good examples of long-term governance done well.
“As Generation X moves into boardrooms and senior leadership roles, they are driving a change in corporate governance shaped by pragmatism, lived experience, and long-term thinking,” said John.
“With rising demands for ESG, continuity planning, and oversight, corporate governance is evolving towards systems that enhance accountability and limit concentrated power.
“From a legal perspective, we’re seeing growing pressure on boards to mitigate key person risk, improve transparency around succession, and rethink governance structures.”
The UK’s growing base of ambitious, scaling companies face increasing scrutiny from investors, lenders, and regulators around leadership continuity.
“Regional businesses are increasingly prioritising responsibility, transparency, and succession planning through stakeholder-led, collective decision-making,” added John.
“It can be too risky for a single individual to dominate strategy without robust oversight. That reversal has major implications for how companies are run and advised.”
John says there are already some great examples of good governance in action amongst his clients and says the governance evolution is not just limited to the corporate world, there are innovative approaches in public and civic sectors as well.
“A good example is Our Manchester Forum, where leaders from public, private, and voluntary sectors make decisions shaped by local stakeholders rather than top-down directives.
“This collaborator-led model reflects a broader appetite for transparency, accountability, and inclusive decision-making. Companies aiming to build resilience and trust have much to learn from it.”
For businesses wanting to take this step, John recommends a thorough review and update of governance procedures, including Articles of Association, directors’ codes of conduct, and shareholder agreements.
“There are many effective checks and balances companies can put in place to ensure collective decision-making and ultimately empower directors to hold CEOs and other leaders to account – including replacing them, if necessary. By taking steps now, a board would be minimising the risk of running into significant and costly disputes in the future.”
Speak to an expert
If you would like to speak to a member of our specialist commercial litigators, please call us on 0800 652 8025 or send an enquiry.
