Legal and Finance: Executive Chairman Is an Endangered Species

Article excerpt

Over the last two years there has been a decrease in the number of FTSE 350 companies with an executive chairman, according to a report from accountants Deloitte & Touche.

The typical FTSE 350 company today has a non-executive chairman and a chief executive.

Of the FTSE 100 companies, 64 per cent now have a non-executive chairman compared to 48 per cent in 2000. In FTSE 250 companies, 65 per cent have a nonexecutive chairman compared to 61 per cent in 2000.

A small proportion of companies retain a joint chairman and chief executive role, despite best practice guidelines of the Combined Code.

This states that there should be a clear division of responsibilities between the running of the board and the running of the business.

The role of the chairman and chief executive remains combined in seven per cent of FTSE 100 and six per cent of FTSE 250 companies.

Julie Swann, adviser on executive compensation matters at Deloitte & Touche in Birmingham, said: 'The legal and the business landscape is due to change dramatically over the next few years.

'Our report looks at the typical UK board before changes such as the new DTI regulations on director's remuneration and Derek Higg's review of the role and responsibilities of the non-executive director take effect.

'We expect them to make an appreciable difference to the structure and composition of the UK board. …