Splitting the Ceo& Chairman

1305 Words6 Pages
Corporate Governance: Separating the CEO and the Chairman Roles
Reference: Millstein Center
Publication Name: D & O Diary
Publication Date: Tuesday, April 14, 2009
Article by : Kevin LaCroix
Article summary:
Many voices are calling public companies to separate the Chairman and CEO functions and to make this model a default governance structure and many evidences shows advantages of that. Pushing to separate the two roles is not a new idea, but it has gained support from many sources lately. The Chairmen’s Forum suggests that the public companies should voluntary adapt the approach of separating the roles or at least explain to the shareholders why is it best for them not to. One of the commentators thinks that separating the
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One of the principals of corporate governance is to answer the questions of would the management be trusted to run the business in the best interest of the owners? How would they be held accountable for their actions? How would absentee owners keep control over the managers? So in order for corporate governance to take place and to be effective is to make sure that the elected board is doing their job.
The board of directors:
The board of directors are a group of individuals who overseas governance of an organization. The duties of the board are setting the corporate strategy, hiring and firing the CEO and top management, monitoring top management, reviewing and approving the use of resources and caring for the stockholder interests. For a board member to be active we should assure full awareness and independency.
Chief Executive Officer: The CEO is the head of the company whom is responsible directly to run the business. The CEO reports to the board and everyone in the company report to him. The CEO setts the company’s strategy and implant it, hire& fire required manpower for the job. In reality the success of a business is a personal success to the CEO.
Splitting the rules of CEO& Chairman:
According to the article splitting the rules is mean to ensure accountability to the
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