Anatomy of the Great Divide – Separating the Roles of Chairman and CEO
Shivam Bhardwaj & Shreyangshi Gupta*
Volume 8 Issue 1-2 (2015)
The corporate sphere, globally, has been known for its power tussle. There have been numerous instances where corporate enterprises have witnessed clashes within different ranks of its substructure, with a view to gain as much control as possible. The focus of corporate governance, in most cases, has been to curb the struggle between the management and the share/stake holders of the company by trying to even out the inherent imbalance be- tween the two camps of the corporation. One of the key mechanisms to do the same has been the evolving concept of a separate Chairman of the board and a Chief Executive Officer. Traditionally, the role had been bestowed on a single individual who was to be the ultimate repository of power, but owing to some catastrophic financial failures witnessed in various nations, the distinction in the two functions was proposed. The present paper maps out the trajectory of advances in the said field of corporate governance in three nations, i.e. the United States, United Kingdom and India. The aim is to juxtapose the advancement in the three countries and analyse the justification advanced by regulators worldwide, in keeping the two positions separate. A cross-national study shall help demystify the corporate temperament in the aforementioned regard and shall present a broad sample space to base the observations. We have argued through the course of the paper that a functional leeway, if made available to the corporations, shall help them to realistically achieve protability and shall also ensure compliance, in letter and spirit, with global corporate governance norms.