Governance Panel Urges Splitting Chairman, CEO Jobs

ByJohn S. McClenahen The title "chairman and CEO" could become the exception and not the rule among U.S. corporations if their boards of directors heed the advice of the majority on the Conference Board's Blue Ribbon Commission on Public Trust and Private Enterprise. Separating the chairman and CEO jobs was one of three alternative recommendations for reforming board structures the panel made in its final report on Jan. 9. The panel was headed by U.S. Treasury Secretary-designate John W. Snow, chairman and CEO of CSX Corp., and Peter G. Peterson, chairman of the Blackstone Group and the New York Federal Reserve Bank and a former U.S. Secretary of Commerce. The chairman and CEO positions should be held by two different people, the panel said. And if the chairman of a corporate board is an "insider," that is, if he or she is an officer of the corporation, then a "lead independent director" should be appointed, the commission recommended. "It is essential that non-CEO chairmen not have any relationships with the CEO or management that compromises their ability to act independently," the panel stressed. If the board chooses not to separate the chairman and CEO jobs -- or if a corporation is in the process of implementing the split -- there should be a "presiding director," the commission said. John H. Biggs, former chairman, president and CEO of TIAA-CREF, a New York-based financial services provider, dissented from the recommendation that the corporate chairman and CEO jobs be split. He said it was unwarranted and would impose unnecessary costs. The Conference Board is a business research organization based in New York.