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  Separating the Roles of Chairman and CEO

Introduction to the Separating the Roles of Chairman and CEO

As described earlier that the role of the chairman is to direct the board of directors and the role of the chief executive officer (CEO) is to direct the management team. The UK (United Kingdom) Corporate Governance Code says that both roles should not be occupied through similar individual.

Comprising a separate chairman may give a number of advantages. The chairman might be a helpful source of support for the chief executive while the occasion demands. In which, for instance, problems which create controversy between board members arise, they are more possible to be resolved while the chairman and chief executive adopt similar stance. A chairman can also work as a sounding board for new ideas and give advice for the chief executive. In several cases, chairmen have taken the position of chief executive at an earlier point in their careers and are older than the chief executive officer (CEO) of the company. So, they are frequently well placed to take on these supportive roles.

Having a separate chairman might also assist in smoothing the path of succession. In which a chief executive leaves the company, the continued existence of the chairman can assist to 'steady the ship' and give a sense of continuity throughout the period of transition. The chairman can also assist a newly-appointed chief executive to settle in and to become well-known with the issues and challenges to be faced.

At last, a separate chairman might assist the company to cope more efficiently with the demands of modern business. The skills and time needed to fulfil both roles are probable to be further than the capacity of a single individual. It is argued that only through separating the roles can appropriate attention be provided to corporate governance matters and to managing the company.

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