Studies Show More Companies Choose to Separate Chairman and CEO Roles

Anthony Deering
Anthony Deering

A graduate of the Wharton School of Business, Anthony W. Deering has established his career in the finance and real estate industries, and he has amassed several years of board experience with such entities as Deutsche Bank, T. Rowe Price, and Alex Brown Realty. Most recently, Anthony W. Deering has served as the Chairman of Exeter Capital, LLC.

In the business world, various researchers and analysts have observed patterns in how companies fill the roles of chairman and CEO. Some organizations operate with one individual fulfilling each position while others employ two separate executives. According to a recent Harvard Law School study, the latter scenario, with two separate roles, is becoming more commonplace.

The study included an analysis of companies on the 2016 Fortune 1000 list. From the results, the team concluded that whereas smaller businesses designate one professional to fulfill the combined duties, larger companies favor filling the chairman and CEO positions with two different leaders. A similar survey of the S&P 500 Index revealed that dual chairman/CEOs lead roughly half of the organizations, compared to 77 percent in the early 2000s.

Although separating the roles appears to be a growing trend, advantages and disadvantages still exist for both approaches. Board members, who elect the chairman, must ultimately decide how to structure these leadership positions to the maximum benefit of their operations.