CEO and board chair roles held jointly or separately: Much ado about nothing?

Academy of Management Executive

Volumn 11, Issue 3, 1997, Pages 11-20

  Daily, Catherine M ^a   Dalton, Dan R ^a  

^a INDIANA UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0042142366     PISSN: 10795545     EISSN: None     Source Type: Journal    
DOI: 10.5465/ame.1997.9709231660     Document Type: Article

References (29)

1. These boardroom changes at General Motors Corporation were recounted by Judith Dobrzynski in "Jack and John: 2 for the Road at GM," The New York Times, July 9, 1995, Section 3, 1.
2. Judith Dobrzynski Jack and John: 2 for the Road at GM The New York Times, 1995, 1. Ibid.
3. Judith Dobrzynski Jack and John: 2 for the Road at GM The New York Times, 1995, 1. Ibid.
4. In L. Levy, "Separate Chairmen: Their Roles and Compensation," The Corporate Board, March/April, 1993a, 10-15.
5. Levy, 1993a, The Corporate Board, op. cit., p. 12.
6. S. Finkelstein and R.A. D'Aveni, "CEO Duality as a Double-Edged Sword: How Boards of Directors Balance Entrenchment Avoidance and Unity of Command," Academy of Management Journal, 37, 1994, 1079-1108 (see p. 1079).
7. M. Lipton and J.W. Lorsch, "The Lead Director," Directors & Boards, Spring, 1993, 28-31.
8. Levy, 1993a, Directors & Boards, op. cit., p. 10.
9. Also see J.H. Dobrzynski, "Chairman and CEO: One Hat Too Many," Business Week, November 18, 1991, 124 for a similar opinion.
10. G.F. Davis and S.A. Thompson, "A Social Movement Perspective on Corporate Control," Administrative Science Quarterly, 39, 1994, 141-173.
11. L. Levy, Separate Chairmen of the Board: Their Roles, Legal Liabilities, and Compensation (a special report of The Corporate Board) (Lansing, MI: Vanguard Publications, 1993b);
12. and "Institutions Buy More Stocks," USA Today, March 25, 1993, B1.
13. B.D. Fromson, "The Big Owners Roar," Fortune, July 30, 1990, 66-78.
14. Dobrzynski, 1991, Fortune, op. cit., p. 124.
15. Fromson, Fortune, op. cit., p. 78.
16. Levy, 1993b, Fortune, op. cit.
17. C.M. Daily and D.R. Dalton, "Bankruptcy and Corporate Governance: The Impact of Board Composition and Structure," Academy of Management Journal 37, 1994, 1603-1617 found a positive relationship between CEO duality and the incidence oi a bankruptcy filing five years prior to the filing.
18. C.M. Daily and D.H. Dalton, "Corporate Governance and the Bankrupt Firm: An Empirical Assessment," Strategic Management Journal, 15, 1994, 643-654, found a relationship between the interaction of CEO duality and low proportions of independent directors and the incidence of a bankruptcy filing both five and three years prior to filing.
19. Korn/Ferry International, Board of Directors Nineteenth Annual Study (New York. NY: Korn/Ferry International, 1992) notes that some 95 percent of separate chairs are retiring CEOs.
20. Dobrzynski, 1995, Board of Directors Nineteenth Annual Study op. cit.
21. Richard F. Vancil, Passing the Baton: Managing the Process of CEO Succession (Boston, MA: Harvard Business School Press, 1987), based on interviews with corporate executives and board members, found that upon retirement it is relatively common for the CEO/board chair to transition to the chair of the board. This practice is, however, the source of continuing controversy due to the potential for conflict between the successor CEO and predecessor, as well as the blurring of lines regarding who is really in control of the firm. See also supra note 38.
22. Nash's comment was cited in F. Fuchsberg, "Chief Executives see their power shrink," The Wall Street Journal, March 15, 1993, B1, B5.
23. J.S. Lublin, "Shareholders Campaign to Dilute Power of Chief Executives by Splitting Top Jobs," The Wall Street Journal, April 1, 1992, B1, B8.
24. B.K. Boyd, "CEO Duality and Firm Performance: A Contingency Model," Strategic Management Journal, 16, 1995, 301-312, found a positive relationship between CEO duality and firm performance in environments characterized by low munificence and high complexity. Both of these environmental conditions may present firm management with challenges which approximate conditions in distressed or failing firms.
25. Hambrick and D'Aveni, Strategic Management Journal, op. cit., p. 1.
26. G. Edmondson, "Only Trailblazers Need Apply," Business Week, May 1, 1995, 54.
27. J. Biggs, "Why TIAA-CREFF is Active in Corporate Governance," The Participant. November, 1995, 2.
28. I.F. Kesner, "Shareholders and the Issue of Corporate Governance: The Silenced Partner," Business Horizons, 32(4), 1989, 16-21 suggests that fewer than one percent of shareholder-initiated resolutions pass and only two-thirds of proxy battles are won. Moreover, the costs of waging a proxy battle can be expected to reach several hundreds of thousands of dollars.
29. B.H. Sheppard, R.J. Lewicki, and J.W. Minton, Organizational Justice: The Search for Fairness in the Workplace. New York: Lexington Books, 1992.