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Administration January 2, 2006
Board Members Vote to Split CEO and Chairman Roles
February 1, 2006 (PLANSPONSOR.com) - Board members
are increasingly advocating that the chairman and CEO roles
be separated to promote a balance of power, according to a
recent survey by global executive search and assessment firm
Russell Reynolds Associates.
Reported by Rebecca Moore
Fifty-nine percent of board members polled advocate separating the chairman and CEO role. Reasons cited for the separation of duties, according to a news release, were:
- 47% believe a separate chairman provides a more effective channel for the board to express its views on management.
- 41% want a separate chairman who can provide the CEO with guidance and feedback on his/her performance.
- 37% believe that the chairman should focus on shareholder interests, while the CEO manages the company.
- 36% are concerned with governance and believe that a separate chairman allows the board to more effectively fulfill its regulatory requirements.
- 34% believe that separating the position allows the chairman to focus on the long-term strategy while the CEO focuses on short-term profitability.
- 24% believe a separate chairman can more effectively concentrate on corporate succession plans.
On the other hand, 41% percent of board members feel the chairman/CEO position should be held by a single executive. Respondents gave the following reasons for keeping the role combined:
- 58% feel that it is easier to recruit CEO candidates to a combined chairman/CEO role.
- 46% feel that splitting the CEO’s and chairman’s role invites a power struggle.
- 44% believe it is important for short-term and long-term strategies to be controlled by a single executive.
- 39% believe that succession plans are clearer with only one top job.
- 24% say that a combined CEO/chairman can better rally the board in a time of crisis.
The 2006 Russell Reynolds Associates Board Member Survey ‘Splitting Chairs’ polled 100 board members with positions ranging from chairman to non-executive independent director to non-executive chairman.
The Russell Reynolds Associates Web site is www.russellreynolds.com .