Our government is predicated on the constitutional doctrine of separating powers as a way of providing a checks and balances system that ensures proper oversight. While somewhat messy at times, the system has worked to safeguard against an over-consolidation of power that could threaten our democracy. As boards of directors are empowered to hire and fire company CEOs at their own discretion, it is critical that the roles of Board Chair and CEO remain independent of one another to avoid obvious conflicts of interest. This is a fundamental yet critical tenet of good corporate governance: separate chair and CEO roles promotes improved oversight, reduces exposure and risk and improves the performance of both the board and management.
Featured ICCR Initiative
Separation of Chair and CEO positions. ICCR members recommend separation of a corporation’s CEO and Chair positions as a fundamental question of good corporate governance to de-consolidate power and strengthen board oversight of key management. Shareholder resolutions urging separation of CEO and Chair averaged high proxy votes of over 25% at 5 of the 6 companies at which these resolutions went to a
vote in 2013, an indication of strong and growing investor support.
This year, ICCR members asked 6 companies, including Chevron, Exxon Mobil and J.P. Morgan Chase, to amend their bylaws to require that the Chair of the board of directors be an independent member
of the board.