November 9, 2016
After Wells Fargo CEO John Stumpf stepped down in October after a month in the spotlight following a fake bank accounts scandal, executive management was not the only team at the company to see a shake-up. After new CEO Tim Sloan was named, lead independent director Stephen Sanger was elevated to chairman, and Elizabeth Duke was appointed to the role of vice chair.
The vice chair role is extremely rare on S&P 500 boards, with only 25 companies total having a director in this position. Indeed, an independent vice chair role—i.e. one that is not either affiliated with or a former employee of the company—is even more obscure. Prior to Duke being named on the board, just seven other companies total had an independent vice chair role.
Wells Fargo’s move was unusual in this regard, but its splitting of the CEO-Chair role is certainly not uncommon. According to a recent Equilar report, Board Composition and Recruiting Trends 2016, the CEO-Chair role has been decreasing in prevalence—down to 50.3% of S&P 500 companies in 2016 as opposed to 56.2% in 2011. Indeed, three major CEO transitions occurred in October, and two of them immediately decided that splitting the executive and chair role would suit them best going forward, which means that a further decrease in that figure can be expected next year.
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