“CEO Tenure is More Important than the CEO-Chair Debate” from FCLTGlobal reaffirms with empirical data the fact that there is no one best board leadership structure; rather, context matters. Numerous studies cited in the article reveal no meaningful difference in corporate performance based on whether there is a combined or separate CEO-board chair structure.
The article notes that combined CEO-chairs tend to have longer tenures than standalone CEOs (averaging three years longer), which generally supports a long-term orientation. Absent optimal continuity in that role, some companies develop other practices and processes that support long-termism.
Relevant contextual factors for weighting one structure over another include the presence or absence of weak corporate disclosure, high complexity, rapid change, degree of board independence, high-growth or transformational periods, company lifecycle, and clarity of responsibilities. Understanding the context can inform the selection of a particular leadership model at a given point in time subject to reevaluation as facts and circumstances inevitably change over time.
Conclusions based on the extensive research to date are as follows:
• Combined CEO/board chair roles are sometimes associated with weaker outcomes, largely due to other structural governance issues, but often, they have no measurable effect.
• In specific contexts, a combined role can support stronger leadership alignment and decision-making.
• Leadership structure alone is never the single primary driver of long-term performance.
See our recent report: “Board & Committee Leadership Attributes & Action Items.”
This post first appeared in the weekly Society Alert!