Three questions to ask before appointing one.
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November 25, 2022
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Summary. Companies like Amazon, Google, and Iron Mountain have opted for an executive board chair in recent years. Separate from the CEO, the executive board chair is typically responsible for both oversight and strategic decision-making. The authors studied S&P 1500 companies from 2002 to 2020 to understand what a board chair does, and when such a position might be beneficial to a company. They found that companies that used the executive chair position for a limited period during a CEO succession significantly outperformed those that did not.
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On February 2, 2021, Jeff Bezos announced that he would “transition to Executive Chair of the Amazon Board and Andy Jassy will become CEO.” While this change marked a major corporate governance shift for Amazon, executive board chairs have become increasingly common. According to Spencer Stuart, 15% of board chairs in the S&P 500 were designated as “executive chair” in 2021. Companies like Autodesk, Ford, Google, Iron Mountain, Occidental Petroleum, and Oracle have opted for an executive board chair in recent years.
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MM Markus Menz is a Professor of Strategic Management and Dean at the Geneva School of Economics and Management, University of Geneva. He is Director of the Geneva Center for Corporate Governance. His research focuses on C-suite positions, the design of top management teams and boards of directors, and corporate headquarters.
RL Robert Langan, Ph.D. works in Leadership Advisory. He is the former Head of Research of the Geneva Center for Corporate Governance at the University of Geneva. His work and research focus on corporate governance, CEO successions, and top management teams.
RK Ryan Krause is Professor of Strategy and Duncan Faculty Fellow at Texas Christian University’s Neeley School of Business. He is also an Associate Editor at the Journal of Management. His research focuses on boards of directors, executive teams, and stakeholder management.
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Read more on Corporate governance or related topic Boards