Know the Roles

A prominent corporate directors group, the Chairmen’s Forum, has recommended splitting the Chairman and CEO functions. There is a slow moving trend to do just that. As the complexity of tasks given to the board increases, having a separate non-executive Chair can make sense. It frees the CEO to focus on running the company.

For this to work smoothly, board members need to understand and respect the new roles. The CEO will remain a member of the board and the board’s employee who leads the company. The board will have a new leader, but the CEO’s role remains vital. The new Chair must also have the experience, wisdom, and judgment to understand the limits of the board’s role and of her or his role. When board and senior management don’t mutually understand their roles, the company is in for trouble. The independent Chair cannot become a co-CEO. The separate role structure creates new dynamics that must be carefully managed for the board to work effectively.

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