How to Separate the Roles of Chairman and CEO

The McKinsey Quarterly, No. 4, 2004

12 Pages Posted: 30 Apr 2006

See all articles by Simon C. Y. Wong

Simon C. Y. Wong

Northwestern University School of Law; London School of Economics; Tapestry Networks

Robert F. Felton

affiliation not provided to SSRN

Abstract

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.

Keywords: corporate governance, separation of chairman and CEO roles

JEL Classification: G34

Suggested Citation

Wong, Simon C. Y. and Felton, Robert F., How to Separate the Roles of Chairman and CEO. The McKinsey Quarterly, No. 4, 2004. Available at SSRN: https://ssrn.com/abstract=898859

Simon C. Y. Wong (Contact Author)

Northwestern University School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States

London School of Economics

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://www.lse.ac.uk/collections/law/staff/simon-wong.htm

Tapestry Networks ( email )

404 Wyman St.
Suite 225
Waltham, MA 02451
United States

Robert F. Felton

affiliation not provided to SSRN

No Address Available

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