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Wednesday, 11 February 2015 04:11

Chairman-CEO Structure - Single Combine Featured

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Only four companies made a single structure change to combine Chairman and CEO roles since 2000. In all cases, the board had an experienced CEO in place to add the Chairman role. All four companies have independent Lead Directors.
At Cis

co, long-time (since 1995) Chairman John Morgridge reached the board age limit in 2006 and became Chairman Emeritus. Per a succession plan, long-time (also 1995) CEO John Chambers added the Chairman role.

At McKesson, the roles were split until long-time Chairman (and former CEO) Alan Seelenfreund stepped down in 2002. CEO John Hammergren then added the Chairman role.

When Altria spun off Kraft Foods (now Mondelez International) in 2007, Kraft CEO Irene Rosenfeld was elected Chairman. Rosenfeld, formerly Chairman and CEO of Frito-Lay, a PepsiCo division, had joined Kraft as CEO in 2006 after Roger Deromedi was eased out of the role when financial results were sluggish. Prior to Rosenfeld’s dual appointment, the roles had been split.

Home Depot went outside for a new CEO and eventual Chairman but with mixed results. The roles had been split between founders Arthur Blank (CEO) and Bernard Marcus (Chairman). In December 2000, Robert Nardelli, formerly of GE, joined as CEO and Blank became co-Chairman. A year later Nardelli added the Chairman role. His tenure, widely regarded as unsuccessful, lasted until 2007, when he was replaced in both roles by Francis Blake.

Table 3: Single Combine

* McKesson had co-CEOs from 1999 to 2001, one of whom transitioned to sole CEO.

What the Governance Guidelines Say

Cisco’s guidelines on leadership structure state: “Both independent and management directors, including the CEO, are eligible for appointment as the Chair. The Chair, or if the Chair is not an independent director, one of the independent directors, may be designated by the independent directors to be the ‘Lead Independent Director.’ The Lead Independent Director will be elected by and from the independent directors.”

The current Mondelez governance guidelines say simply: “From time to time, the Board determines the leadership structure that serves it best. The Board has determined that the Chief Executive Officer should also serve as the Chairman of the Board.”

McKesson’s guidelines focus on the Chairman role: “The Board does not require the separation of the offices of the Chairman of the Board (the “Chairman”) and the Chief Executive Officer. The Board shall be free to choose its Chairman in any way that it deems best for the Company at any given point in time. If the Chairman is not an Independent Director, . . . a Lead Independent Director will be elected by a majority of Independent Directors.” The guidelines include a detailed charter for an Independent Lead Director.

Home Depot’s guidelines do not cover leadership structure but do specify the role of the Lead Independent Director.

Read 351 times Last modified on Wednesday, 24 June 2020 17:16
Dora Vell

Dora Vell is the Managing Partner of Vell Executive Search, a boutique executive search firm in Boston focused on recruiting technology executives and board members. Vell has successfully completed numerous board member and C-level executive searches, including CEOs, COOs, CIOs, and Vice Presidents - at both public and private companies.

Prior to founding the firm in 2005, Vell was a Partner at Heidrick & Struggles' Technology practice for seven years.  Before her career in executive search, she worked at IBM for 11 years, managing software engineering organizations of 100 people and software sales organizations with revenues of $150 million. She has also served as an executive assistant to the CEO of IBM Canada for one year.

Vell holds seven worldwide software patents. She has published several Business of Leadership reports on governance and leadership and has been quoted in numerous articles including The Wall Street Journal, Forbes, Business Week, Fortune, Agenda Week, MSNBC, Mass High Tech, the OPUS for the World Economic Forum, Boston Business Journal, The Globe & Mail, CIO Magazine, and IEEE. She also has been a featured speaker on leadership at numerous conferences and at Columbia University's MBA program.

Vell is a member of the National Association of Corporate Directors (NACD), the Boston CEO Roundtable. She has served on the boards of Framingham State, Entrepreneur's Organization, Goodwill, Mary Centre for developmentally handicapped adults,, and RBC Capital Partners.

She has received an MBA from the University of Toronto, a Master in Computer Science from the University of Waterloo, and a Bachelor in Computer Science from Carleton. She has also completed the MIT Entrepreneurial Master’s program.

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