Tesla’s board is spectacularly bad at its job — even measured by its own very low bar.

As the charges of securities-law violations filed late last week against the electric-car company and CEO Elon Musk indicate, Tesla’s directors failed at the job that’s supposed to be the top priority of any board — overseeing top executives. But they also failed at doing what they’ve defined as their highest duty — ensuring that Musk remains the unquestioned leader at Tesla as its CEO and chairman. As part of the settlement the company and Musk agreed to with the SEC, Musk will step down as chairman of the board.

In fact, Tesla’s board is so horrible at its job, that the SEC effectively ordered it to undergo a shakeup as part of the settlements. Not only does the company need to replace Musk as chairman, but it also needs to add two new, independent directors to the board. What’s more, the SEC found it necessary in its settlement with the company to order directors to do what they should have been doing all along — keeping a close watch over Tesla’s CEO.

Tesla allegedly had no Twitter policy for Musk

The SEC complaints were related to Musk’s infamous “funding secured” tweets from last month. The agency charged that Musk knew— or had reason to know — that the statements he posted on Twitter about potentially taking the company private were false and misleading.

But in the complaint it filed against Tesla itself, the SEC made clear that the board itself was also at fault. In a public regulatory filing in 2013, the company alerted the agency and investors that it planned to use Musk’s Twitter account to communicate with investors. That meant that anything that Musk or the company posted on that account pertaining to information about the company — and there was a lot of it — would have to meet the same disclosure requirements as official company statements such as press releases or documents filed with the SEC.

Despite that, no one on the board or at the company reviewed Musk’s tweets before he posted them, according to the SEC’s complaint. Worse, the company had no procedures or rules in place to ensure that Musk’s Twitter statements met SEC disclosure requirements.

“Until after the August 7, 2018 tweets, Tesla had no corporate policies that specifically addressed Musk’s use of Twitter,” the SEC charged.

As part of the settlements, Tesla and Musk declined to admit to or deny the agency’s allegations. That’s par for the course; when the SEC settles charges with defendants, the latter rarely acknowledge guilt. But you can take the company agreement as part of the settlement to pay a $20 million fee and to shake up its board as a tacit admission that the board wasn’t doing its job.

Tesla’s board was doing its best impression of Nero

It’s been clear for a long time now that instead of overseeing Musk, Tesla’s directors saw it as their job to defer to and empower him. But the SEC complaint against Musk added additional details about the board’s negligence in the form of the detailed timeline of the events leading up to and following his statements that a move to take the electric-car company private was all but a done deal.

The actors that are conspicuously absent from much of that sequence of events: Tesla’s directors. They’re also notably absent in CNBC’s story about the events immediately leading up to the SEC’s decision to file charges, during which time Musk reportedly rejected the agency’s initial settlement offer — a move that for a short time put in doubt whether he’d be able to remain at the company at all.

After Musk rejected that offer, the agency filed suit against him and sought to permanently bar him from serving as an officer or director of any public company. Musk ended up settling with the SEC the next day.

In other words, Tesla was facing what its own directors apparently considered an existential threat — Musk’s departure — yet they seemed to do almost nothing to prevent it. Instead, they seemed to be fiddling while Rome was burning.

Neither Tesla nor Musk have commented publicly on the settlements. But in response to the charges that were filed Friday against Musk himself, the board put out a statement that almost read like a non-sequitur. It didn’t directly address the SEC’s complaint or its possible consequences. Instead, it seemed to indicate that the company and it would continue on with business as usual.

“Tesla and the board of directors are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful US auto company in over a century,” the board said. “Our focus remains on the continued ramp of Model 3 production and delivering for our customers, shareholders and employees.”

Musk’s tweets about Tesla going private got him in trouble

Musk is in trouble for a series of tweets sent August 7 in which he stated that he was considering taking Tesla private at a $420 a share price, that the funding for such a deal was already “secured,” that investors were on board, and that the only barrier left to the move was a shareholder vote. He also said that the company was hoping to structure the deal so that all current investors could remain shareholders in the company even after it went private if they so chose.

According to the SEC complaint, Musk had reason to know when he made the statements that pretty much all of them were false or misleading. Although he’d spoken with Saudi Arabia’s sovereign wealth fund about a deal to take Tesla private prior to the tweets, they hadn’t discussed a price and had no formal, signed agreement in place, according to the SEC. The company hadn’t even begun to work through how it might structure the deal so everyday shareholders could remain investors, the SEC said.

By the time of the tweets, the board hadn’t even received a formal proposal for such a transaction, much less voted to approve it, according to the complaint. And Musk hadn’t spoken to any institutional investors about such a deal, the SEC said.

Tesla’s board is largely absent from the SEC’s timeline

The SEC’s complaints against Musk and Tesla are largely focused on the actions of Musk himself, but they do give some insights into what happened inside the company after his tweets. Some 35 minutes after Musk sent his initial “funding secured,” Deepak Ahuja, Tesla’s chief financial officer, sent him a text message asking whether Ahuja and other Tesla executives should craft a message for Musk to send to employees and investors that explained the rationale for the move. Musk sent out that email later in the day.

Fred Prouser/Reuters

Meanwhile, just minutes after that first tweet, Tesla’s head of investor relations sent his own text to Musk asking him to verify the tweet. The IR head, along with Musk’s chief of staff and Musk himself, then fielded multiple inquiries from reporters, investors, and analysts asking for clarification about the tweets.

There’s no indication from the complaints that Tesla’s directors said anything to Musk about them or reacted to them in any particular way.

And that’s odd, because if the SEC complaints are correct, they — as much as Musk — had reason to suspect that at least some of the tweets were false. They knew, for example, that more needed to be done to complete a going private transaction than just getting a shareholder vote, according to the SEC. At least one of them, according to the complaint, seemed to know that structuring such a deal so that everyday shareholders could remain investors was dubious — and that the board hadn’t even considered a formal proposal for how to do that.

One would also think that the board would have immediately tried to get an explanation from Musk about his tweets, since the idea that a deal was mostly done would have come as news to them, as the complaint makes clear.

Yet despite that, there’s no indication in the complaints that the board confronted Musk about the tweets or encouraged him to correct the record in short order. Tesla representatives did not respond to an email seeking information about discussions the board may have had with Musk about his tweets or his negotiations with the SEC.

Regardless, the board certainly didn’t clear up Musk’s alleged false statements itself. Instead, it allowed those statement to remain in place for nearly a week.

The board had reason to know Musk was in serious trouble

It wasn’t until August 13 that Musk himself started walking back his tweets, acknowledging that there was no formal proposal to take the company private and nothing had been presented to the board. On August 24, he publicly abandoned the effort in a blog post, acknowledging for the first time that there were potential obstacles to allowing current shareholders to remain investors after the company went private.

The SEC reportedly opened an investigation into Musk’s tweets by the day after he posted them and subpoenaed the company’s directors on the matter within weeks. So, directors had every reason to know that Musk and Tesla faced serious legal trouble soon after he made the statements. The SEC complaints can and do lead to the ouster of executives and even to criminal charges by the Department of Justice.

One would expect that Tesla’s directors would have been doing everything they could to placate the SEC and to push Musk to settle the case on terms as favorable as he could get, as soon as possible, especially if those terms allowed him to keep his chairman and CEO titles.

That’s because directors have made it clear that keeping Musk at the company has been paramount for them. Earlier this year, in explaining why it needed to hand out a stock award to him that could pay him as much as $55.8 billion, directors explained that he was a crucial component to the company.

“The board believes that having the active and engaged services of Mr. Musk is important to the continued growth and long-term interests of Tesla,” the directors said. “While the board recognizes that Tesla has many valuable employees who have been a critical part of Tesla’s success, the board believes that many of Tesla’s past successes were driven significantly by Mr. Musk’s leadership.”

When Musk rejected the SEC’s initial settlement offer, there was a real chance that he would be forced out of any kind of leadership role at the company. Despite that threat, there’s no indication in the reports about Musk’s negotiations with the SEC that the board played any active role in advising its CEO during that period.

By the board’s own terms, the settlement is a big loss for Tesla

Musk ultimately agreed to step down as chairman, pay a $20 million fine, and have his communications with investors overseen by the company. Additionally, Tesla agreed to add the new board members and pay its own $20 million fine.

Although those penalties are somewhat harsher than what the SEC initially offered, they still look a lot like a slap on the wrist compared to what the agency could have gotten if it took the case to trial. After all, Musk remains at the company.

But by the board’s own words, his removal as chairman is a significant blow to Tesla. This spring, shareholders proposed that the company bar Musk or anyone else from holding both the CEO and chairman titles. In arguing against the proposal — which investors ended up voting down — Tesla’s board emphasized how important it was to the company that Musk retain both roles.

“The board believes that the company’s success to date would not have been possible if the board was led by another director lacking Elon Musk’s day-to-day exposure to the company’s business,” it said. The board continued:

“The board believes that it is precisely during times when a company must quickly adapt to constant change and outside pressures that board leadership needs to be lockstep with the company’s operations. Our achievements to date notwithstanding, the company is still at a point in its development where we must execute well in order to realize our long-term goals, and separating the roles of chief executive officer and chairman at this time would not serve the best interests of the company or its stockholders.”

Now, thanks to the board’s lack of oversight of Musk, Tesla will have to face its uncertain future without him holding both roles. In other words, while the company’s directors helped fend off an investor proposal to disempower Musk, their ineptitude led to him losing his crucial chairman role anyway.

So, great job, Tesla directors. Not only are you bad at looking out for the interests of shareholders, you’re weren’t even good at protecting your all-important CEO. And now the company, investors, and Musk have all paid the price — and may have to keep paying it.

Kiichiro Sato/AP

• Elon Musk will no longer serve as chairman of Tesla‘s board of directors as part of the CEO’s settlement with the Securities and Exchange Commission. 
• Four of the board’s nine members could still have conflicts, though, according to proxy-firm Glass Lewis.
• In an interview, Glass Lewis’ head of environmental, social, and governance research explained the problems facing Tesla’s board. 

After a dramatic weekend, Elon Musk agreed to step down as chairman of Tesla’s board and pay a $20 million fine to settle a lawsuit brought by the Securities and Exchange Commission regarding his failed bid to take the electric-car maker private in August.

But even with Musk out, there are still some major issues facing Tesla’s board of directors, according to Glass Lewis, one of the largest and most influential proxy advisor firms. The firm had previously raised its concerns ahead of Tesla’s annual shareholder meeting in May — but many of its recommendations were not passed.

In an interview with Business Insider, Glass Lewis’ head of environmental, social, and governance research explained why the SEC settlement pushes Tesla’s board into uncharted waters, and that many of these problems would have been more easily fixed if it had gone about them on its own time.

“It gets challenging when it gets to this point,” Courteney Keatinge, head of ESG at Glass Lewis, told Business Insider on Monday.

“Once a company has had so many scandals and there are leadership issues, it can get challenging to change that dynamic. This would have gone over easier if it were something the board had determined on its own with the support of Elon Musk. Ultimately, this is getting at what we think is best for the company and for shareholders.”

Still, many of the board seats are held by directors that Glass Lewis says aren’t adequately independent. Tesla discloses two directors — Elon Musk and his brother Kimbal — as non-independent, meaning they have connections that could deem them insiders. Two others, however, deserve this distinction and contribute to Glass Lewis’ concerns: Antonio Gracias and Brad Buss.

“What’s particularly concerning regarding director Gracias, is that he is on the audit committee which is a committee we really want unquestionably independent directors to be sitting on,” Keatinge said. Gracias is the CEO of Valor Management, a private-equity firm that has received past commitments from a revocable trust owned by Elon Musk. Additionally, VMC has been paid consulting fees by Tesla in the past, Glass Lewis said.

Brad Buss found himself on Tesla’s board thanks to the SolarCity merger back in 2016. Tesla considers him independent, but Glass Lewis says this connection makes him unfit for the board’s audit committee.

To be fair, the duo’s connections on paper don’t necessarily mean Gracias and Buss can’t vote independently in the board room. “What’s important to remember is that boards are a big group of people,” Keatinge explained.

“And there are differently personalities and traits that people have. However, we’re not in the board room, so it’s hard for us to understand how the board is working if there is an actual check on Elon Musk and his behavior.”

Even if Musk’s removal as chairman is a wake-up call for shareholders, replacing nearly half of the directors won’t be something investors can do in a single vote thanks to the staggered terms used by Tesla.

“Not every director is up for election every year, which serves to entrench the board,” Keatinge said. “So shareholders were not able to vote on whether or not they should continue to remain on the board and will serve a three-year term.”

Going forward it all comes down to who the board chooses to replace Musk as chairman.

“Things can change drastically even in a year,” said Keatinge.

“It will depend on what Elon Musk’s relationship and what the board member’s relationship with the independent chair looks like and that’s really going to determine how effective this individual can be. It is an entrenched board and there are a lot of personal ties to Musk, so its hard to tell if they will that director the deference it will require.”

Markets Insider

When you finally log off and head to a Halloween party this October 31, you’ll want to let everyone know where you’ve spent the past 364 days: online.

Luckily, while 2018 hasn’t given us much in the way of good news, the meme harvest has been bountiful. And a lot of them translate nicely into Halloween costumes.

Here are a few of the best — and, more importantly, the easiest to pull off.

1. Mason Ramsey

The Walmart yodel kid is a superstar now, but the getup he wore for his aisle rendition of Hank Williams’s “Lovesick Blues” would still make a great costume. You’ll just need a white button-down, a red bow tie, a statement belt, and, of course, a pair of cowboy boots. Just be prepared for someone to request a song.

2. Moth and lamp

September’s hottest pair was the moth and the lamp, although the romance did seem a bit one-sided. This meme would make an impressive couple’s costume if you’re headed to a particularly internet-y Halloween party. Bonus: neither look is noticeably better than the other, so you won’t argue about who gets to be who. In fact, both costumes look pretty uncomfortable.

3. Sad Howdy Boy

Find a yellow t-shirt. Paint a sad face on it. Wear a cowboy hat. Put on “Space Cowboy.” Practice your despondent “yee-haw.”

4. Tide Pod

Sure, you could painstakingly assemble an elaborate cardboard Tide Pod. Or you could just buy this shirt. Or, if you’re really feeling low-effort, simply wear one blue item, one white item, and one orange item.

5. Kylo Ren pants

A large portion of Instagram already took the #KyloRenChallenge, so why not keep the look going for Halloween? You could even complete the look with one of those weird muscle-shirt-costume-things. Good luck explaining this costume to people who spend a healthy amount of time on the internet.

6. Meghan Markle

The Duchess of Sussex isn’t just a meme, of course. But she did star in more than a few viral tweets this year. (Welcome, Meghan, to the meme community.) Plus, a Meghan Markle costume is a great excuse to wear and inevitably ruin a beautiful white dress. And you can do fake freckles!

7. Michaela Coel in Black Mirror

One of the internet’s finest reaction images, Michaela Coel’s look from the Black Mirror episode “U.S.S. Callister,” would make a wonderful costume even without the meme factor. Be sure to perfect your knowing, conspiratorial facial expressions.

8. “Change my mind” guy

Unlike Coel, this guy sucks. But if you can figure out how to make some kind of booth apparatus, he’d make a pretty good Halloween costume. Instead of using his wildly untrue original statement (“Male privilege is a myth”), we’d suggest using a statement from one of the later meme riffs. You don’t want to make literally thousands of enemies on Halloween night.

9. Super Bowl selfie kid

Remember that kid who took a selfie with Justin Timberlake Super Bowl halftime show? Get yourself a gray hooded sweatshirt and a bunch of lanyards. Will anyone know who you are? No. But the costume will probably cost $0.

10. “Is This A Pigeon?”

It was the screenshot from anime series The Brave Fighter of Sun Fighbird heard ’round the world. At this point, “is this a pigeon” memes have reached peak saturation, but the character’s look — he’s an android, by the way — is super easy to replicate. Get yourself a nice fake butterfly as an accessory. You’ll have a great time.

CHICAGO — For weeks, the Chicago Cubs had the NL Central all wrapped up.

A month without a day off, injuries to key players, an MLB investigation of Addison Russell – none of it mattered as the Cubs rolled on. Even the prospect of a winner-take-all game against the suddenly loathsome Milwaukee Brewers was only a minor irritation, given it was at Wrigley Field and the Cubs had Jose Quintana on the mound.

Now the Cubs are fighting for their postseason lives, forced into a wild-card game after a 3-1 loss to the Brewers on Monday afternoon. And while there are plenty of folks who came up short – MVP candidate Javy Baez, I’m looking at you – this one falls squarely on manager Joe Maddon and his bullpen management.

As will what would go down as one of the biggest collapses in Cubs history should Chicago come up short again Tuesday.

Maddon blew through six relievers against the Brewers. While Justin Wilson, Steve Cishek and Randy Rosario each threw 15 pitches or less, Jesse Chavez worked two innings and Brandon Kintzler and Jaime Garcia both threw 20-plus pitches.

He yanked Wilson after he gave up back-to-back hits at the start of the eighth inning, only to see Cishek give up the go-ahead run on a single to Lorenzo Cain. He brought in Rosario, who retired Christian Yelich on a strikeout – the first Cubs pitcher to make the likely MVP look human Monday – then promptly replaced him with Kintzler. That resulted in Ryan Braun’s insurance run, a single to center. 

For those keeping score, that was four Cubs pitchers to get three outs while giving up two runs.

Maddon managed his pitching staff as if there was no (game) tomorrow. And now there is.

While the Cubs will get time off should they beat the winner of the Rockies-Dodgers game, how much will Maddon’s taxed bullpen be a factor? This is a team not far removed from a 30-day stretch without a day off, remember. Now at least a few players will start the playoffs weary.

But anyone who’s watched the Cubs the last few seasons won’t be overly surprised by this.

If there’s a knock on Maddon, it’s his use of his bullpen. Remember Game 7 of the World Series? Monday’s game was no different. Quintana was 6-2 lifetime against the Brewers, including a 4-1 record this season. While Milwaukee had more success against him Monday than they had previously, pulling him with two outs in the sixth seemed like too quick of a hook.

The move paid off initially, as Chavez struck out Ryan Braun and got out of the inning with a double play. He set Milwaukee down 1-2-3 in the seventh, too.

Then came the eighth inning. And now the Cubs, the team that was on cruise control for the last three months, no longer control anything in the postseason.

***

Follow USA TODAY Sports columnist Nancy Armour on Twitter @nrarmour. 

 

The Apple Watch is packed with useful features, and WatchOS 5 has only made the lineup more impressive. Here are the top 11 tips and tricks you should know. Have you ever wanted to rotate your watch’s orientation, use your watch as a camera remote, or display your apps as a list instead of a grid? Here are the top Apple Watch features you might not know. Following is a transcript of the video.

It’s easy to find your phone by tapping this button in the control center. But if you’re hard of hearing, holding it will also make the flash go off.

Take a screenshot by pressing both buttons at once. It will show up in the Photos app on your phone. Make sure General – Enable Screenshots is checked

Flip the entire screen around. This is great for lefties. Just go to General – Watch Orientation. Choose “Right Wrist.” You can also change the side of the crown. If you want to wear the watch upside down

Display apps as a list instead of a grid. Tap the crown to bring up all the icons. Then force press and choose “List View.”

The watch has a nightstand mode. To enable it, go to General – Nightstand Mode. Turn the watch sideways while it’s on the charger. The screen will rotate and show the date and time.

Use the crown to control your phone’s volume. Just go into “Now Playing” and rotate the crown up or down

Use the watch as a camera remote. Open the camera app on the watch. Tap anywhere to change the focus. Force press to bring up options like flash and the selfie camera. You can snap a photo immediately, or use the 3-second timer

Incoming call and can’t find your phone? Rotate the crown up. Tap “Answer on iPhone” and the caller will be placed on hold. Giving you time to find your phone.

It’s hard to text on the watch. But you can make your own custom auto-replies. In the app, go to My Watch – Messages – Default Replies. Scroll down to add your own. They’ll appear in the watch’s messaging app.

Rearrange the control center. This is new in WatchOS 5. Swipe up to bring up the control center. Choose “Edit” to rearrange the icons. Press the crown or swipe down when you’re done.

Change the app layout. Go to My Watch – App Layout, and move around the icons.

Thanks to K-pop’s growing visibility in the U.S., NCT 127‘s upcoming October comeback is looking bigger — and bolder — than ever.

The Seoul-based unit is officially Apple Music’s newest “Up Next” artist, joining the likes of Grammy-nominated R&B crooner Khalid, cool teen Billie Eilish, and pop hitmaker Bazzi (who co-wrote NCT Dream’s latest single, “We Go Up”). This is especially cool considering that NCT 127 is the program’s first K-pop partnership.

The announcement even gives fans a taste of what to expect from their next single, “Regular,” which sounds like another bass-heavy bop à la “Limitless.”

So in addition to the group’s first full-length album release on October 12, their first late-night appearance in the U.S. on Jimmy Kimmel Live! on October 8, and the formal introduction of their tenth member, Jungwoo, NCTzens have even more to look forward to this comeback season. On October 9, Apple Music will release a short film documenting the band and their global sound, before dropping an exclusive choreography video on release day.

The month-long rollout kicked off today (October 1) with a special Beats 1 interview with the group. The members break down their sound, talk about the Western artists who inspire — from Frank Ocean to The Internet to DJ Khaled — and give fans a preview of the lead single off their anticipated album, Regular-Irregular.

Rapper Mark describes “Regular” as a very “confident song” that shows off the group’s “masculine side” and global growth.

NCT 127 will release two versions of the Latin-infused song; the English single and music video will drop the day after their Kimmel performance on October 9, and the Korean version and visual will be released October 12. It’s an ambitious strategy aimed directly at the Western market, but if BTS’ unprecedented success has proven anything, it’s that the cultural barriers that once prevented Korean artists from making it big in the U.S. are being smashed one milestone at a time.

And NCT 127 are now at least a little closer to their dream of becoming the biggest hit on the stage.