Assessing the Independence of the Board Chairperson: Fact or Fallacy?

Authors

  • Catherine M. Daily Purdue University
  • Dan R. Dalton Indiana University

Abstract

Corporate observers have recently devoted increased effort at encouraging corporations to separate the positions of CEO and board chairperson. The primary rationale driving this action is that board chairpersons who do not also serve as CEO are believed to be more independent from firm management than are those board chairpersons who also serve as CEO. Separation of these positions may be especially important in entrepreneurial firms where the founder often remains active in firm affairs. An investigation of Inc. 100 corporations indicates that separate chairpersons do, in fact, differ with respect to tenure as CEO, tenure with the company, stock holdings, and founder status when compared to CEOs who serve simultaneously as chairperson of the board. On two additional dimensions (extent of familial relationships, inside/outside succession), however, separate and joint CEO/board chairpersons cannot be distinguished.

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Published

1996-01-11

Issue

Vol. 7 No. 1 (1996)

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Articles

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How to Cite

Assessing the Independence of the Board Chairperson: Fact or Fallacy?. (1996). Journal of Small Business Strategy (archive Only), 7(1), 99-114. https://libjournals.mtsu.edu/index.php/jsbs/article/view/332