What is the argument in favor and against of merging the roles of
chairman and CEO?
The argument in favor of merging the roles of chairman and
CEO is one of efficiency. By putting the leadership of the board of directors
and the senior management team in the hands of the same person, the potential
for conflict is minimized and, it is argued, the board is given the benefit of
leadership from someone who is in touch with the inner workings of the
organization rather than an outsider who needs time to get up to speed.
The argument against merging the roles of chairman and CEO
is an ethical one. Governance of the corporation is now in the hands of one
person, which eliminates the checks and balances process that the board was
created in the first place. This type of situation compromises the independence
of the board, and the powers of the stockholders are minimized.
Source: Ghillyer_Business Ethics A Real World Approach 2e
Source: Ghillyer_Business Ethics A Real World Approach 2e
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