NEW YORK (Reuters) – More U.S. companies are splitting theroles of chairman and chief executive among different people,with corporations in the telecommunications and mediaindustries the most likely to divide the two jobs, according tonew data on Monday.
Corporate governance advocates often contend thatseparating the chairman and CEO roles improves accountabilityand provides checks and balances in the boardroom. But othersargue that splitting the jobs can cause confusion over who isin charge.
Fifty-two percent of the U.S. companies tracked byGovernanceMetrics International, a corporate governanceresearch and ratings service, had a combined chairman and CEOas of the most recently available data. That compares with 62percent three years ago, the firm said.
"The trend is clearly heading to separate the positions,"said Howard Sherman, CEO of GovernanceMetrics. "At the sametime, a large number of U.S. companies are creating a leaddirector position, which is a way to counterbalance a combinedchairman and CEO."
Not all companies are moving to split the roles. Lastmonth, for instance, Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) shareholdersrejected a proposal by dissident shareholders that urged theoil company to choose an independent chairman to lead itsboard.
GovernanceMetrics found that among the roughly 1,750 U.S.companies in its database, utility and automotive companieswere most likely to have the same person serving as bothchairman and CEO.
At U.S. utilities tracked by the governance researcher, 70percent had the same person in both jobs, while at automobileand parts companies, 67 percent had combined CEOs and chairmen.
In contrast, 30 percent of telecommunications companies hadthe same person holding down both the chairman and CEO jobs,while 38 percent of media companies had dual chairman and CEOsand 39 percent of technology companies also had the rolescombined.
Overall, U.S. companies combine the two jobs much moreoften than businesses in other countries do. Separating thejobs is commonplace at British companies, where only 3 percentof companies in GovernanceMetrics’ database currently have acombined chairman and CEO.
In both France and Mexico, 42 percent of companies trackedby GovernanceMetrics have the same person serving in both jobs,while in India, 25 percent of companies combine the jobs, andin Japan, 13 percent.
(Editing by Gary Hill)
? Thomson Reuters 2008 All rights reserved
