When Chairman and CEO Roles Split

The pros and cons of splitting the chairman and CEO roles are in the spotlight after Bear Stearns’ James Cayne stepped down last week as chief executive but remained board chairman.

Wall Street Journal managing news editor Joann Lublin reports today that the division of labor, long favored by governance advocates, has gained momentum slowly in the U.S., where many CEOs resist sharing power.

Around 36 percent of Standard & Poors 500 companies have separate chairmen and CEOs, up from 22 percent in 2002, according to the Corporate Library, a research group in Portland, Maine. As at Bear Stearns, splits in the top posts at American businesses are often the result of a leadership transition or financial trouble. In numerous cases, the chairman is a concern's retired CEO. Bear Stearns President Alan D. Shwartz has been chosen to succeed Cayne as CEO.

For insight into how to perform the relatively new role, American executives increasingly look to Britain, where most major public companies have divorced the roles since a 1992 corporate-governance reform effort. The chairman usually comes from outside company ranks.