On February 2, 2021, Jeff Bezos announced that he would “transition to Executive Chair of the Amazon Board and Andy Jassy will become CEO.” While this change marked a major corporate governance shift for Amazon, executive board chairs have become increasingly common. According to Spencer Stuart, 15% of board chairs in the S&P 500 were designated as “executive chair” in 2021. Companies like Autodesk, Ford, Google, Iron Mountain, Occidental Petroleum, and Oracle have opted for an executive board chair in recent years.
Does Your Board Need an Executive Chair?
Three questions to ask before appointing one.
November 25, 2022
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Summary.
Companies like Amazon, Google, and Iron Mountain have opted for an executive board chair in recent years. Separate from the CEO, the executive board chair is typically responsible for both oversight and strategic decision-making. The authors studied S&P 1500 companies from 2002 to 2020 to understand what a board chair does, and when such a position might be beneficial to a company. They found that companies that used the executive chair position for a limited period during a CEO succession significantly outperformed those that did not.