General Motors announced that Chairman Edward E. Whitacre would become the automaker’s permanent CEO. The company’s decision to recombine the roles came just 10 months after the positions were separated following the U.S. government’s ouster of CEO Rick Wagoner, who held both jobs. Ted Allen of RiskMetrics comments on GM’s recent decision to combine the roles of chairman and CEO in a blog post.
According to news reports, it appears that GM’s board decided that the need for stability outweighed the potential corporate governance concerns posed by combining the roles. The U.S. government still owns a 60.8 percent stake in automaker, and it does not appear that the company’s board sought approval from Obama administration officials. GM no longer has any publicly traded shares since emerging from bankruptcy in July.
Whitacre, a long-time telecommunications executive, held both the chairman and CEO titles at AT&T from 2005 to 2007 and at SBC from 1990 to 2005.
GM is taking the opposite approach of Whole Foods Market, which announced in late December that it was splitting the two roles. The divergent approaches suggest that the question of combining or splitting the CEO and chairman roles will remain a key governance issue this year.
In addition to a proposal at Whole Foods, labor pension funds and other investors have filed 36 resolutions for the 2010 proxy season that urge companies to appoint independent board chairs, according to RiskMetrics Group data.
In addition, U.S. companies will be required under new SEC disclosure rules this year to elaborate on their reasons for selecting a particular board leadership structure.