The observation by 19th century historian Lord Acton that “power tends to corrupt and absolute power corrupts absolutely” seems appropriate when analysing one of the most significant trends in corporate governance — the steady demise of the “all-powerful” executive.
Over the past decade, the joint chief executive/chairman has become a dying breed. Globally, the number of new appointees holding the chief executive/chairman role has dropped to a record low as corporate governance best practice moves towards the idea that the two most senior roles at a listed company should be split, says Strategy&, a consulting arm of professional services group PwC.
The UK’s corporate governance code advises against combining the two posts. Only one company in the FTSE 100 — Hikma Pharmaceuticals — has one person, Said Darwazah, sharing the chief executive and chairman roles, says research group MSCI.