Chairman, CEO/MD positions: To separate or not to separate

The Kotak Committee on corporate governance reforms constituted by the Securities and Exchange Board of India (Sebi), recommended separation of the positions of a chairman and the CEO/MD. The logic was the leader of the board should not be the leader of the management thus providing a better-balanced structure of supervision and management. The guiding principles of the recommendation were:

• ensuring the board acts independently
• avoiding the risk of concentrating authority in a single individual
• offering role clarity without overlap
• reducing time commitment leading to focussed role play
• choosing the right fit for each role rather than clubbing skill sets
• making the board atmosphere more conducive