Chairman and CEO: The Controversy Over Board Leadership Structure

12 Pages Posted: 25 Jun 2016

See all articles by David F. Larcker

David F. Larcker

Stanford Graduate School of Business; Stanford University - Hoover Institution; European Corporate Governance Institute (ECGI)

Brian Tayan

Stanford University - Graduate School of Business

Date Written: June 24, 2016


One of the most controversial issues in corporate governance is whether the CEO of a corporation should also serve as chairman of the board. In theory, an independent board chair improves the ability of the board to oversee management. However, an independent chairman is not unambiguously positive, and can lead to duplication of leadership, impair decision making, and create internal confusion — particularly when an effective dual chairman/CEO is already in place.

In this Closer Look, we examine in detail the leadership structure of publicly traded corporations and the circumstances under which they are changed. We ask:

• What factors should the board consider in deciding whether to combine or separate board leadership? • How can the board weigh the tradeoffs between stability of leadership, efficient decision making, and decreased oversight? • What structure should be the default setting for a corporation? • Why do activists advocate that corporations strictly separate the roles when there is little research support for this position?

The Stanford Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance and executive leadership. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important. Larcker and Tayan are co-authors of the books Corporate Governance Matters and A Real Look at Real World Corporate Governance.

Keywords: Board of directors, CEO, chief executive officer, independent chairman, independence standards, leadership, board structure, corporate governance research

JEL Classification: G30, G32, G34

Suggested Citation

Larcker, David F. and Tayan, Brian, Chairman and CEO: The Controversy Over Board Leadership Structure (June 24, 2016). Rock Center for Corporate Governance at Stanford University Closer Look Series: Topics, Issues and Controversies in Corporate Governance No. CGRP-58, Stanford University Graduate School of Business Research Paper No. 16-32, Available at SSRN:

David F. Larcker (Contact Author)

Stanford Graduate School of Business ( email )

Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
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650-725-6159 (Phone)

Stanford University - Hoover Institution ( email )

Stanford, CA 94305
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Brian Tayan

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

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