AFF 604 Chapter Notes - Chapter 30: Bicameralism, Human Capital, Joint-Stock Company
22 May 2017
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Sets specific requirements regarding the internal governance structures and functions of public corporations. Issue is the manner by which the board arranges the leadership role of the firm"s ceo and the chairperson of the board. In what other capacity does the ceo of the firm simultaneously serve: common structure: when the same person serves as the ceo and chairperson of the board. Argument: compromise the ability of the board to reasonably monitor the ceo. Without the direction of an independent leader, much more difficult for the board to perform its critical function. Directors are unable to evaluate the performance, policies and practices of a firm"s ceo when the ceo serves as a chairperson as well: alternative: ceo and chairperson held separately. Unity of command in a crisis environment: between 2007-2009, more firms are separating roles of ceo and chairperson due to a tumultuous economic environment, opposite of what one might expect under challenging conditions.
