by Lawrence A. Cunningham for The Wall Street Journal
Earlier this month came refreshing news that an activist shareholder had agreed to withdraw a proposal to split the roles of CEO and chairman at Bank of America in exchange for a study of the bank’s corporate culture and guiding values. This presents an opportunity to discuss corporate leadership beyond stale debates about formal job functions and to focus more on substance: talent at the top and the tone that leaders set.
Proponents of splitting executive and board leaders are correct that good governance promotes institutional health, but there are no guarantees that formal splits advance this interest. And many uncontroversial ideas can do so, especially electing savvy directors or appointing exemplary officers.
Shareholders of several hundred companies are now considering whether to split the CEO and chairman roles. While some argue that dividing corporate power checks executive hubris, many shareholders vote against the split as long as a corporation performs satisfactorily. In 2012 Chesapeake EnergyCorp. voted to break up the positions, whileJ.P. Morgan voted no in 2013. Read more here.