Denholm has been on the board of Tesla since 2014, and has been the head of the company's audit committee. "And, of course, that was the whole point of the SEC settlement". The shares were up 12 per cent this year through the close Wednesday.
Tesla said Denholm will be serving as Tesla chair on a full-time basis.
However, Denholm will have the hard task of of overseeing billionaire Musk who will still be with the firm.
According to Tesla, she will leave the Australian telco at the end of her six-month notice period. She won't take on another job.More news: Democrats warn Trump after Attorney General Sessions forced out
In July, the company had more than $US2 billion wiped off its value after Mr Musk called one of the divers involved in the rescue of 12 Thai children from a cave a "pedo". Denholm has been working with Telstra for two years, during which she has received borne media scrutiny about her ability to manage her time between the Australian and North American company.
Her new role at Tesla came largely because of the board's failure to control Musk, especially when he made a surprise announcement over Twitter in August that funding was secured to take Tesla private at US$420 ($621.67) per share. There are two more independent directors to be added.
Longtime forum members have recently become suspicious of a user who goes by the name of "Fact Checking", and have gone as far as saying that it could be Musky Boy himself. "She's not a proven entity in this kind of work", she said. "This exercise, brought on by the SEC deal, was to teach Musk a lesson and this is an easy way to fulfill the requirement".
Musk, who remains Tesla's biggest shareholder and the driving force behind its ambitious plans to reshape electric battery technology and vehicle transport, tweeted https://twitter.com/elonmusk/status/1060452014642016256 his approval of the appointment.
Email messages sent to Denholm Thursday were not immediately returned.
The settlement requires Tesla to install an independent chairman, among other penalties.