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.
The prosand cons of splitting the chairman and CEO roles are in the spotlight after BearStearns’ James Cayne stepped down last week as chief executive but remained boardchairman.
WallStreet Journal managing news editor Joann Lublin reports today that the divisionof labor, long favored by governance advocates, has gained momentum slowly inthe U.S.,where many CEOs resist sharing power.
Around36 percent of Standard & Poors 500 companies have separate chairmen and CEOs, upfrom 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 oftenthe 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.
Forinsight into how to perform the relatively new role, American executivesincreasingly look to Britain,where most major public companies have divorced the roles since a 1992corporate-governance reform effort. The chairman usually comes from outsidecompany ranks.
