Boards & Shareholders
Considering a Split Between the Board and CEO
By Jaclyn Jaeger the company. On the legislative front, Chairman and CEO Jay Brown to split
Sen. Charles Schumer has also introduced his jobs.
W hether the pressure comes from
shareholders, new rules or legisla-
tive reform, the contentious question of
a bill with language that would split the
CEO and chairman roles.
The pressure to split leadership roles
MBIA is a “unique” example, Alogna
said, because Brown believed that sepa-
rating the roles voluntarily—so the CEO
splitting the CEO and board chairman is already taking effect: only 53 percent could focus more on management, while
roles is likely to become a reality for U.S. of the S&P 1500 companies now keep a the chairman could focus more on roles
companies sooner or later. combined CEO-chairman, compared to of the board—would help the business.
But preparing for such a shift in lead- 70 percent in 2003.
ership requires an equally important shift Many companies already have “argu- Culture Development
in corporate culture, which most compa-
nies aren’t prepared for, experts say.
With the current economic crisis in
ably been influenced by the current envi-
ronment,” Alogna said. In August, for ex-
ample, AIG split the roles of its chairman
D avis and Alogna warned that the
drive to split top leadership will
require adjustments to a company’s cul-
particular, companies are facing a “very and CEO. Bank of America shareholders ture, as the workforce sorts out life under
significant tipping point,” Stephen Alo- approved a resolution to split the roles in an independent chairman. Davis recom-
gna, a senior manager for Deloitte, said April, as did shareholders at Office De- mended directors join organizations like
during a Sept. 2 Webcast on independent pot. And in May, the board of MBIA ac- the Chairmen’s Forum to understand
leadership. Investors today have more cepted a recommendation from current
means than ever to influence companies Continued on Page 69
and boards, and “We’re going to see more
of that happening in the next couple of WHO’S THE BOSS?
years,” he said.
In addition, while the push to split the Prevalence of board leadership structures at S&P 1500 companies as of Aug. 1, 2009:
CEO-chairman roles is not new, corpo-
rate boards will likely feel “a big jolt” next Status Percentage
year when shareholders gain some sort of
Chairman and CEO are combined 53.6%
ability to place director nominations in
the corporate proxy statement, according Chairman is an independent outsider 21.1%
to Stephen Davis, director of Yale Uni- Chairman and CEO are separated but chairman is an insider/employee or an
versity’s Millstein Center for Corporate 22.7%
Governance (and a regular Compliance