Chairman-cum-CEO, a powerful combination – Times of India

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BENGALURU: There are some 60 foreign-headquartered corporations with income over $1 billion every which might be immediately led by Indian-origin executives, in accordance with Indiaspora, a non-profit that seeks to deliver collectively Indian diaspora for collective motion. Just a few of them mix the roles of chairman and CEO, and Satya Nadella has simply joined that choose group.
IBM veteran Arvind Krishna, who was appointed CEO of the corporate early final yr, took on the extra position of chairman in December. Prem Watsa of Fairfax Monetary Providers additionally holds each positions, as does Shantanu Narayen of Adobe, and Nikesh Arora of Palo Alto Networks. Mastercard’s Ajay Banga is government chairman, which supplies him an operational position too.

There are totally different views on whether or not the identical individual ought to maintain each roles. Vijay Govindarajan, Coxe Distinguished professor, Tuck College of Enterprise at Dartmouth & government fellow, Harvard Business School, mentioned often the chairman of the board in public firms is separate from the CEO in order that the Board can act on behalf of shareholders to make sure company governance. However Microsoft, he says, remains to be a excessive development firm and the CEO compensation is generally in Microsoft inventory choices whose worth is dependent upon realising Microsoft’s future development, thereby aligning the CEO’s curiosity with these of shareholders. “Finally, the difficulty boils all the way down to the standard of the chief. Satya Nadella is a sensible chief, so elevating him to the chairman’s position will serve Microsoft shareholders effectively,” he mentioned.
Nevertheless, Nirmalya Kumar, Lee Kong Chian professor of selling at Singapore Administration College and Distinguished Fellow at INSEAD Rising Markets Institute, believes combining the roles is a foul concept. “The inherent battle of curiosity in combining roles is well-known as a result of then the chairman is voting on his/her personal compensation and the position of the Board in monitoring the administration is diluted, if not compromised,” he mentioned. A robust chairman, he mentioned, acts as a verify on the CEO and a wholesome rigidity between them results in extra considerate selections.

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