How to Separate the Roles of Chairman and CEO
Simon C. Y. Wong
Northwestern University School of Law; London School of Economics
Robert F. Felton
affiliation not provided to SSRN
The McKinsey Quarterly, No. 4, 2004
Under pressure from shareholders and regulators to improve corporate governance, companies in the United States are increasingly splitting the roles of chairman and CEO. Experience from the United Kingdom, where the same shift began a decade ago, shows that what may seem like a straightforward change of responsibilities is actually a complicated process influenced by unpredictable variables, such as the personal psychology of the two people chosen for the posts. Many companies thought they were splitting the roles well, only to stumble along the way.
Company directors, who bear ultimate responsibility for making the split succeed, can take practical steps to smooth the process, from choosing the best moment for implementing the change to ensuring that the executives chosen to hold these two positions have complementary characters and ambitions.
Number of Pages in PDF File: 12
Keywords: corporate governance, separation of chairman and CEO roles
JEL Classification: G34Accepted Paper Series
Date posted: April 30, 2006
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