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Split Decisions: CEO/Chair Positions Decline in Response to Shareholder Concerns


February 10, 2016

Traditionally, corporations combined the roles of chief executive officer and board chair, appointing the position to a single leader, but in recent years, shareholders have raised concerns about the combination of these two primary leadership roles. For example, in 2013 Jamie Dimon of JPMorgan Chase fought for and successfully retained his dual position, winning majority of investors’ approval. In fall 2015, Bank of America called its own vote on whether Brian Moynihan should remain CEO and Chairman of the Board, when shareholders also ruled in favor of the status quo.

Proponents of unifying the two positions argue that it leads to strong leadership, and promotes both efficiency and better communication at the upper echelons of the corporate structure. A chair separated from the executive team may not have sufficient information and knowledge on the day-to-day operations of the corporation, and one person occupying both roles might make better decisions that result in superior business outcomes.

Concerned shareholders often rebut the case for a combined role by arguing a dual CEO/Chair lacks the independence to represent investor interests. Since boards are directly responsible for their CEO’s job security, appointing the CEO as a board chair could potentially raise a conflict of interest. Concerns regarding cost are also an issue—a study by GMI Ratings shows that the cost of splitting the two roles is less than combining them.

In the past 10 years, the concerns regarding independence of a CEO/Chair appear to be winning out. Though combining the CEO and chair roles is still majority practice, a preference for splitting the roles has emerged. In 2014, CEO/Chairs led 55.1% of S&P 500 boards, down from 60.3% in 2010 and 67.1% in 2005. Other than a slight rebound in 2008, the trend has been on a consistent downslope in that time frame.

What these numbers do not show is that most companies who retain the combined role also have appointed a lead independent director, perhaps in an effort to alleviate shareholder concerns. In 2014, 82.8% of S&P 500 companies led by a CEO/Chair also appointed a lead independent director, up from 62.3% in 2010 and 32.7% in 2005—again a clear and consistent trend line.

As the largest public companies popularize the practice of splitting the CEO and chair roles, proponents of combining the roles argue that there does not seem to be much proof that splitting the roles necessarily leads to success. But given the trends of the past decade, we may see separate roles outnumbering combined roles in the coming years, easing the growing concerns of an empowered shareholder base.


The data in this report is powered by Equilar’s BoardEdge, which not only includes information on 140,000 directors and executives qualified for board service, but also more than a dozen categories about each board member’s background and leadership experience. BoardEdge’s defining feature is a networking tool that clearly displays how board members are connected to each other.

For more information on BoardEdge, or to request a demo, click here.

For more information on Equilar’s research and data analysis, please contact Dan Marcec, Director of Content & Marketing Communications at dmarcec@equilar.com. Billy Zou, research analyst, contributed to this post.

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