“Off With Their Heads!” is the title of Liz Moyer’s recent piece in Forbes on subprime director accountability initiatives.

In the article, Moyer discusses the “vote no” initiatives at WaMu, Citi and Morgan Stanley, but she also writes more generally about the building momentum for the good governance practice of splitting the roles of board chairman and chief executive.

Moyer notes:

“A board's role in overseeing risk management is just one of several concerns that have gained more prominence this proxy season…Among other corporate governance concerns likely to gain additional credibility now is the idea of splitting the roles of chairman and chief executive. This is an idea that has taken off in large companies. According to RiskMetrics Group, which owns ISS, 37% of companies had separate chairmen and chief executives last year, up from 30% in 2005.

“So far, there are 20 shareholder proposals this year seeking an independent board chairman, including those on ballots at Bank of America, Citi and Wells Fargo.

“Citigroup, in ousting Prince last year, split those roles between Win Bischoff, a senior banker--in its London offices--who is chairman, and Vikram Pandit, its chief executive who joined the company last spring when it bought his hedge fund.

“Bear Stearns split its top spots in February when James Cayne stepped aside as chief executive to make way for Alan Schwartz.

“Nine other major banks still have combined roles, however, including Merrill Lynch, which ousted E. Stanley O'Neal last fall and brought in John Thain as its new chairman and chief executive. Mack holds both titles at Morgan Stanley.

‘Investors may very well question whether too much power lies with the CEO and whether more independent and accountable directors are warranted,’ RiskMetrics says in a report.”

Posted by Anna Mumford on April 11, 2008 5:21 PM