More than 50 high-profile corporate executives, investors and think tanks pushed for splitting the role of CEO and Chairman on Monday.
A new report, supported by, among others, the founder of KB Home and SunAmerica, Eli Broad; the Chairman and CEO of MBIA, Jay Brown, and the Chairman of Thomson Reuters, Niall FitzGerald, calls for all American companies to appoint a separate chairman and CEO. It was first reported in the Wall Street Journal.
The push comes in the wake of a surge in shareholder activism over the issue, including, most recently, the nonbinding proposal by shareholder activist Robert Monks to split the CEO and Chairmanship at Exxon Mobil Corp.
According to RiskMetrics Group Inc., so far this year, investors submitted 39 resolutions seeking an independent board chairman, five more than in all of 2008, the Wall Street Journal reported.
Here are the requirements for a good Chairman, as laid out by the report:
-Clearly spell out duties of the CEO and chairman to staffers and shareholders
-Pick a separate chairman with the experience, attributes and time required
-Chairman should be a consensus builder
-Chairman needs the courage to ask hard questions
-Chairman should possess a certain humility -- and not see post as path to executive leadership
Harry Pearce, a retired General Motors Corp. vice chairman who is chairman of MDU Resources Group Inc. and Nortel Networks Corp., told the Wall Street Journal that by splitting the two roles a company "would perform better overall -- and not just in shareholder returns."
The Millstein Center for Corporate Governance and Performance at Yale University's School of Management and the Chairmen's Forum published the report. It is considering asking the New York Stock Exchange and Nasdaq to adopt the separation of the two positions among its listing rules.According to the Wall Street Journal, citing a report from the Corporate Library, 37% of companies in the Standard & Poor's 500-stock index have separate chairmen and CEOs, up from 22% in 2002.
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