[vc_row][vc_column][vc_column_text margin_bottom=”20″]A recent article in Fortune titled “Should the chairman be the CEO?” outlines the main reasons why public companies should split these roles.
I couldn’t agree more and find it incredible that still today the majority of US public companies have combined CEO and Chairman roles. This engenders the mistaken view that the CEO is all-powerful and should not require oversight. While the article is talking about public companies, the same applies to private companies as well.
So why is it important to have a separate chairman and CEO? Put simply, the CEO is the primary manager of the company and the chairman is the head of the board, which oversees management. There’s really no good reason why one person should do both jobs. – Paul Hodgson, Fortune Magazine
With the roles combined, how can the Chairman monitor the performance of the CEO on behalf of the shareholders, other than by looking in the mirror in the morning?
It is likely that the negotiations for CEO salary must go much more smoothly with the roles combined!
Admittedly, many of those boards now have a Lead Director and the Compensation Committee has been charged with setting the CEO salary. Why not simply do the right thing and have an independent Chair of the Board.
What are your thoughts on splitting the CEO and Chairman role? Let us know in the comments section below.
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About The Author
Claude Haw is the Executive Leader for the Strategy & Governance practice at Business Sherpa Group. He has been directly involved as a senior manager, CEO, founder, funder, mentor, advisor and board member of more that 30 private, public and not-for-profit corporations over the past three decades. Claude loves working with energetic and passionate people to take their business to the next level.