October 31, 2025
• In today’s CEO Daily: Geoff Colvin on CEOs who are also board chairs.
• The big story: OpenAI IPO coming.
• The markets: U.S. futures are up; global markets are mixed.
• Plus: All the news and watercooler chat from Fortune.
When Citigroup last week gave CEO Jane Fraser the additional role of board of directors’ chair, the event was a widely covered ho-hum. CEOs are often board chairs as well, and the move merely gave her the same positions held by JPMorgan Chase’s Jamie Dimon and Goldman Sachs’s David Solomon. But the news isn’t quite as ho-hum as it seems.
“They were wrong to do that,” says Charles Elson, founding director of the John L. Weinberg Center for Corporate Governance at the University of Delaware and a director on several boards over his career. “The CEO is being overseen by the board, and it doesn’t make sense for the person being monitored to chair the group that’s monitoring them.”
Asked for comment, Citi responds, “The lead independent director has the responsibility for organizing and leading sessions with the independent directors (without management present) to evaluate CEO performance, including strategy execution and leadership.”
The logic of separating CEOs from board chairs may seem obvious, but it was flouted for decades when individual investors owned most corporate shares and mostly voted the way the company wanted, if they voted at all. “There was no shareholder large enough to demand a seat on the board,” Elson says. In that environment, CEOs in 1990 were also board chairs at more than 90% of traded companies.
It could be a cushy life for CEOs. I well recall the CEO and board chair of a manufacturing company (which I won’t name) telling me smugly he had just bought a corporate airplane for his directors to use. He said he didn’t expect much trouble from them after that.
Then power shifted. Institutional investors like pension funds began accumulating significant amounts of shares in the 1990s and started voting to separate CEOs from board chairs. The financial crisis of 2008-2009 was a turning point: Citigroup, Bank of America, and AIG, badly damaged and under pressure from shareholders and regulators, separated their CEOs from their board chairs. Now, with Fraser’s new title, all three companies have reverted to CEOs who are also board chairs.
Nonetheless, the big picture shows a dramatic shift to board chairs separate from the CEO over the past 35 years. Only 40% of the Fortune 500 have CEO board chairs. But on the rise is a different title with the same effect: “executive chair.” That’s a board chair, often a recently retired CEO remaining on the board, who oversees the company’s day-to-day workings (thus the word “executive”). Operationally, the executive chair is the real CEO without the title. It’s another way for that real CEO to be board chair too.
Elson’s view: “Those who forget the mistakes of history are doomed to repeat them. Sad but classic.” —Geoff Colvin
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
