Power Of Ceo / Chairman - 1005 Words

Increased power of CEO/Chairman Most of the publicly owned companies are against combining the roles; they vote for an independent chairman to help control the board and balance the power. Shareholders do have the right to have the best representation of their interests and independence. In case of combined roles, the CEO sets the agenda for the board or, basically, himself, there is a conflict of interests and supervision. The percentage of firms that do vote for splitting these roles is constantly increasing. Since the corporations are required to have board to oversee the management and ensure that it reflects best interests of shareholders, the argument for separating the roles is constantly rising. Another argument is that combining†¦show more content†¦However, before splitting these roles up, each company has to decide which is best for them. Many companies consider if one person is skilled enough, can objectively run the company and represent shareholders interests, be responsible for company’s performance, and decide which is better for the long-term interest. In some companies it has been a routine meeting or even debate of keeping two different people in this position, mostly driven by shareholder activists. It was absolutely obvious to the board that one person can fulfill both roles and act quickly enough in taking corporate initiatives. On the other hand, issue with conflicts of interests, decision-making, and possible corruption has risen many times. Also, it makes more difficult to the board objectively evaluate the CEO/Chairman if one person hold the spot. By holding the roles in hands of tow different people, the two executives can focus better on the company rather than on its own benefits (compensation package or else), the CEO can better focus on daily operations while the chairman will be focusing in overseeing the regulations, board members, and, most importantly, strategic and succession planning. The trend of keeping rising on keeping these roles separate, the board can prioritize its independence from the CEO. More than 40% of the companies have followed the trend, however, the