The need to separate the functions of chairman and chief executive has been a raging debate in City of London parlours for the past couple or years, and companies at which the two roles are combined in one person have been under enormous pressure to accept a separation of powers: now the same debate could take off across the Atlantic as Compaq Computer Corp’s (non-executive) chairman Ben Rosen tells the House Telecommunications and Finance Subcommittee that the troubles that have beset some of America’s largest companies can be traced to cozy relationships between their boards and their chief executives – he declares that the boards of most US companies are chaired by the company’s chief executive, who picks the board members and controls the agenda – With an appropriate form of corporate governance, I fully believe that the current problems of IBM, Digital Equipment, Westinghouse and other major American corporations could have been addressed and probably solved far earlier with much reduced ill effects, Rosen told the legislators, adding that a company’s chairman should be a truly outside independent director, not the chief executive or a former chief executive, and that all board members, with the exception of the chief executive, should also be outsiders, who should get their directors’ fees in the form of shares or options.
