Do STEP 3. And make a post that combines all of these 3 discussion posts below.

Do STEP 3. And make a post that combines all of these 3 discussion posts below.
Step 1: Post
By 11:59 PM on Sunday September 29th post to this discussion board.
Please read the articles below and answer the following prompts:
1. 23andMe Download 23andMe- Why did the directors resign? How could this situation have been avoided?
2. Delaware Registration Download Delaware Registration- Why are companies trying to move out of Delaware? Who is driving this change? Do you think this is a positive or negative development and why?
3. SpaceX/Tesla Switch Download SpaceX/Tesla Switch- Why was Elon Musk able to move SpaceX to Texas but not Tesla (yet)? Do you think that’s a positive or negative attribute of the different types of companies/entities and why?
4. Tesla’s Board Chair Download Tesla’s Board Chair- Why is Tesla’s chair of their board under scrutiny? Can she be an independent director?
Step 2: Read your classmates’ posts and schedule a virtual meeting with all group members.
By 11:59 PM on Monday September 30th you need to meet virtually as a group and prepare your group answer. Identify the group member that will post the group’s answer to the board.
Discuss each other’s posts. Develop a group answer.
Step 3: Post Again
By 11:59 PM on Monday September 30th and one group member needs to post the group’s answers from step 2 to the discussion board. Each member will need to fill this role at least once throughout the course.
Reply from TICAELAH BRIDGES
23andMe:
The directors resigned due to the lack of trust in the founder and chief executive plan to turn the company private and her inability to produce a fully financed, diligenced, and actionable proposal that is the best interests of non-affiliated shareholders. This situation could have been avoided Wojcick would see favors in the stockholders instead of her owns and establish trust to the board of directors that a business model would be made in a timely manner with financial and ethical details included.
Delaware Registration:
Companies are moving out of Delaware due to other states like Nevada passing legislations to lower litigation costs and offer greater protection for directors and executives. Who is driving this change are minority shareholders due to Delaware’s Supreme Court misuse of their business judgement rule allowing directors and officers to make lucrative decisions for their own personal benefit. I think this is a positive development for shareholders to gain protection against owners wrongdoings and being compensated. Nevada is providing legislations for companies to have liability protections and a favorable tax environment.
Space X/ Tesla Switch:
Elon Musk was able to move SpaceX to Texas because it is a privately traded company which he has the authority to do. Publicly traded companies can move states through domestication where the business entity requires filing in the new state and the dissolution of the business in its current state and the approval of shareholders. This could be a positive attribution for sole proprietorships for wanting to form their business in a different state or in this instance, a public trading company wanting to relocate to access new markets for business growth. It can be a negative attribution to general partnerships due to the partners have to be in agreement for the success of the business.
Tesla Board Chair:
Tesla’s board chair, Robyn M. Denholm, is under scrutiny due to her not performing her role overseeing the chief executive and do what is best for all of the company’s shareholders. Robyn M. Denholm could become an independent director as she has great experience and qualifications of the role. People are more concerned about why hasn’t she stepped up to Elon Musk about his outburst in the media and his plans with Tesla.
Reply from LIA NASIOS
Board of Directors/Fiduciary Duty
The directors of 23andMe resigned due to disagreements with CEO Anne Wojcicki over her plan to take the company private, citing a lack of any actionable buyout proposal that served the best interests of shareholders.This situation could have been avoided through more transparent communication, offering a fully financed proposal, and collaborating with the board to address financial concerns while considering other potential buyers to resolve the strategic direction issues(Winkler, 2024).
The rigid corporate law of the state and enhanced scrutiny of the transactions involving a controlling shareholder are some of the reasons why companies try to move out from Delaware. Nevada and Texas, among other states, have opened their doors to these fleeing companies since they gave more corporate-friendly legal jurisdictions with the probability of reduced litigation costs and enhanced protection for the directors and executives. Shareholders and highly visible executives, such as Elon Musk and Greg Maffei, are driving this change(Francis & Mulvaney, 2024). These developments may be assessed as positive because they allow flexibility to companies, but they may be negative because they will lead to weakened shareholder protection.
Actually, Elon Musk was able to relocate SpaceX to Texas because it is a private company, and he has absolute authority to decide on issues such as incorporation. On the other hand, Tesla is a public company, and therefore, changing its incorporation would involve seeking the approval of its shareholders(Ives, 2024). The differences are worthwhile in showing how other private companies are quite different from public ones in terms of freedom. This difference is seen as a plus for private companies because of flexibility of operations and a minus for public entities because their decisions involve shareholders​
Tesla’s board chair, Robyn Denholm, is also said to have failed in her duties to exercise sufficient oversight on Elon Musk and his actions as the CEO of the firm. Some claim she has not been a strong counterbalance to Musk; in fact, a Delaware court accused her of being ‘lackadaisical’ in her supervision of the $50 billion compensation plan of Musk.Some questions concerning her independence arise because of her potential conflicts of interest since she receives a significant amount of compensation from Tesla, which exceeds $280 million. Furthermore, several other board members are affiliated with Musk, and therefore, it is hard for Denholm to exercise independent authority(Frost & Ewing, 2024).

References
Francis, T., & Mulvaney, E. (2024, February 11). Elon Musk Isn’t the Only Billionaire Fighting Delaware. WSJ; The Wall Street Journal. https://www.wsj.com/business/elon-musk-isnt-the-only-billionaire-fighting-delawares-grip-on-u-s-business-e9fe299a#:~:text=Two%20minority%20shareholders%20sued%20theLinks to an external site.
Frost, N., & Ewing, J. (2024, February 15). Tesla’s Board Chair Under Scrutiny for Oversight of Elon Musk. Nytimes.com; The New York Times. https://www.nytimes.com/2024/02/15/business/teslas-board-elon-musk-robyn-denholm.html#:~:text=%E2%80%9CMusk%20operates%20as%20if%20freeLinks to an external site.
Ives, M. (2024, February 15). Elon Musk Says SpaceX Has Switched Incorporation to Texas. Nytimes.com; The New York Times. https://www.nytimes.com/2024/02/15/business/spacex-delaware-texas.html#:~:text=The%20billionaire%20said%20his%20privateLinks to an external site.
Winkler, R. (2024, September 18). 23andMe CEO Anne Wojcicki Plans to Take Company Private. WSJ. https://www.wsj.com/tech/biotech/23andme-ceo-anne-wojcicki-plans-to-take-company-private-1a9265ebLinks to an external site.
Reply from JULIA BLANKENSHIP
23andMe:
The seven directors resigned for a variety of reasons, but the decision was ultimately made when Chief Executive Anne Wojcicki continuously failed to agree with the board on strategic and profitable business planning, specifically on the interest of shareholders. In the last few years, the WSJ article discusses how 23andMe has struggled to find profitability in their business model with an overall valuation of $7 million which is down from $6 billion in 2021. Wojcicki also controls 49% of the ownership votes in 23andMe, meaning that she has an incredibly high veto power and prevented the board from pursuing potential bidders. One of the biggest disagreements between Wojcicki and the board was the preference to take the publicly traded company and go private instead, which was Wojcicki’s idea. This situation could have been avoided with a restructuring of the ownership and power between the board. If Wojcicki agreed to have less ownership in the company and allowed for other board members to have a greater say in company decisions, they could have come to an agreement on business strategy and profitability easier without resignations. If other board members had greater control or even equal control of the company, they could have found potential bidders and created more intentional strategies to benefit the non-affiliated shareholders like the board wanted. This article touches on the importance of voting and ownership power of individuals. If one individual has too much veto power or control over other board members, it can lead to a stalemate and greater challenges when one board member makes all the decisions.
Delaware Registration:
Companies are moving out of Delaware because Delaware has strict rulings about shareholders and their integration into business decisions by ensuring they are treated fairly. However, there are states, like Texas and Nevada, that have more protection for management, less taxes, and less litigation costs for corporations, which is enticing corporations to move to have less financial burdens. Elon Musk started driving this change because he had challenges in Delaware’s legal system over Tesla’s recent pay package. The Delaware court ruled against Musk, leading to Musk’s public statement about business owners avoiding incorporation in Delaware. Greg Maffei has also faced problems with Delaware’s legal system in regards to shareholders and their say in business decisions since Delaware applies stronger legal standards when companies pursue transactions that disproportionately benefit shareholders with controlling power. Whereas, Nevada has more protections for managers and directors that would allow controlling shareholders to execute their power more freely.
I believe this is a negative development that companies are moving out of Delaware into states like Nevada and Texas because this shift primarily benefits management and directors, not the shareholders. Minority shareholders who were once given an equal vote when the business was incorporated in Delaware are now faced with the issue of unfair influence on business decisions. If shareholders do not have influence over decisions, there is a greater possibility that management will make decisions that negatively affect shareholders since their vote wouldn’t make a difference. In addition, Delaware has very developed business laws that attract corporations to incorporate since business owners understand the predictability of their actions and business practices. However, if companies start to move to states with a less developed business law, the outcome of court cases and legal opinions will be more uncertain.
SpaceX/Tesla Switch:
Elon Musk wants to reincorporate Tesla in Texas, but it would be harder to move Tesla compared to SpaceX because Tesla is a publicly traded company. Publicly traded companies require shareholder approval for such relocation, so the odds of Musk getting all shareholders to agree with this decision would be challenging. I believe this is a positive attribute to different types of entities because shareholders will be impacted by different legal rulings and governmental regulations depending on the state in which the company is incorporated. Many shareholders are familiar with the business law and court decisions in Delaware whereas Texas has much newer and potentially underdeveloped business law, leading to more uncertainty and worry from shareholders on their power and influence in company decisions. Shareholders of public companies have an important role in ensuring the company’s management is making ethical and agreeable decisions, and bringing in shareholder’s opinions fosters more diverse, thoughtful conversations, especially in big decisions like relocation or M&As. However, this would be a frustrating aspect of publicly traded companies for owners as they can’t make decisions for the business without input from shareholders and normally these decisions take more time and are harder to accomplish.
Tesla’s Board Chair:
Tesla’s chair of their board, Robyn Denholm, is under scrutiny because the public claims she has not been able to tame Elon Musk’s outrageous behavior and fails to effectively be a check on his decisions. However, the article argues that she may struggle to manage Musk because many Tesla executives are financially tied to Musk or are personally involved with him. Denholm could be an independent director for Tesla and serve as a check on Musk’s actions while representing the voices and opinions of shareholders. She can only be an independent director if she does not have significant financial ties to the company to allow for an independent, unbiased opinion on decisions. Through this move, Teslas’ shareholders would be increasingly confident that a payout package that Musk previously desired could not be entertained again. There would also be more checks and balances on his ability to have more ownership and make decisions that only benefit himself. In addition, Tesla’s stock is currently down due to shareholders’ nervousness about Musk’s decisions regarding Tesla. This decrease in stock price could be reversed in the future with an independent director who could foster a more positive relationship between Tesla’s board of directors (including Musk) and shareholders.