Permitting one individual to function as both the chief executive officer of a company and the chairperson of its board has no impact upon the power of the stockholders.

Question

Quizplus · Accepted Answer

Permitting one individual to function as both the CEO and the chair of the board consolidates too much power in one person and diminishes the ability of stockholders to hold the company accountable. This is because the CEO/chair may prioritize their own interests or those of a select group over those of the broader shareholder base. Therefore, separating the roles of CEO and chair is a common corporate governance best practice.

Permitting One Individual to Function as Both the Chief Executive