The Myth of Splitting the CEO/Chair jobs

By now, it's the perceived wisdom that people who are chief executive officers should not also be chairmen of the board. Institutional Shareholder Services and all sorts of rating agencies state, with complete conviction, that the job should be split--at all times, and at all companies.

But the reality is a lot trickier. One situation in which it does make sense is if a CEO is retiring and wants to retreat to the chairman's position for a finite period of time. At Procter & Gamble, for example, CEO A.G. Lafley told me he appreciated the fact that John Pepper remained as chairman for a year or 18 months to smooth the way for Lafley.

But in other cases, it may simply create confusion to have a CEO and a separate chairman, particularly if that chairman believes he or she has executive responsibilities. (Some chairmen are considered non-executive, which helps ease the confusion.)

The problem if you have a CEO and an executive chairman is how do you split up the decision-making responsibility? Where is the real fulcrum of decision-making? If a CEO knows that he or she could be second-guessed by a chairman, that would put a damper on his or her willingness to take risks. But the real problem is confusion, which leads to conflict.

Don't get me wrong--I believe in achieving the right balance between a CEO and the board. But there needs to be great clarity--it's the CEO's job to manage and it's the board's job to ask the right questions and provide wise counsel. If anyone on the board believes that he or she has a responsibility to be too involved in running the business, that's a problem.

What is your experience?