Corporate governance advocates often contend that separating the chairman and CEO roles improves accountability and provides checks and balances in the boardroom. But others argue that splitting the jobs can cause confusion over who is in charge. NEW YORK (Reuters) - More U.S. companies are splitting the
roles of chairman and chief executive among different people,
with corporations in the telecommunications and media
industries the most likely to divide the two jobs, according to
new data on Monday.
Corporate governance advocates often contend that
separating the chairman and CEO roles improves accountability
and provides checks and balances in the boardroom. But others
argue that splitting the jobs can cause confusion over who is
in charge.
Fifty-two percent of the U.S. companies tracked by
GovernanceMetrics International, a corporate governance
research and ratings service, had a combined chairman and CEO
as of the most recently available data. That compares with 62
percent three years ago, the firm said.
"The trend is clearly heading to separate the positions,"
said Howard Sherman, CEO of GovernanceMetrics. "At the same
time, a large number of U.S. companies are creating a lead
director position, which is a way to counterbalance a combined
chairman and CEO."
Not all companies are moving to split the roles. Last
month, for instance, Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) shareholders
rejected a proposal by dissident shareholders that urged the
oil company to choose an independent chairman to lead its
board.
GovernanceMetrics found that among the roughly 1,750 U.S.
companies in its database, utility and automotive companies
were most likely to have the same person serving as both
chairman and CEO.
At U.S. utilities tracked by the governance researcher, 70
percent had the same person in both jobs, while at automobile
and parts companies, 67 percent had combined CEOs and chairmen.
In contrast, 30 percent of telecommunications companies had
the same person holding down both the chairman and CEO jobs,
while 38 percent of media companies had dual chairman and CEOs
and 39 percent of technology companies also had the roles
combined.
Overall, U.S. companies combine the two jobs much more
often than businesses in other countries do. Separating the
jobs is commonplace at British companies, where only 3 percent
of companies in GovernanceMetrics' database currently have a
combined chairman and CEO.
In both France and Mexico, 42 percent of companies tracked
by GovernanceMetrics have the same person serving in both jobs,
while in India, 25 percent of companies combine the jobs, and
in Japan, 13 percent.
(Editing by Gary Hill)
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