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Splitting the CEO and Chairman Roles: It’s Complicated …

Splitting the CEO and Chairman Roles: It???s Complicated ???
Photograph by Steve Hix/Somos Images/Corbis

It seems that every year calls ring out louder and louder for boards to separate the roles of CEO and chairman. Large companies from Wells Fargo (WFC) to News Corp. (NWSA) have faced shareholder proposals demanding that they replace their CEO with an independent director in the role of chairman.

Advocates of splitting the positions argue that an independent leader will aid the board in more effectively monitoring the CEO’s actions and performance. Critics of the combined CEO/chairman role include institutional investors, policymakers, and a preponderance of corporate governance experts and advisory firms. Many executives disagree, however, arguing that such a structure creates unnecessary confusion and hurts unity of leadership.