Answer to Question #142170 in Financial Math for maureen

Question

Using relevant examples, explain why the position of CEO and that of chairman should not be held by one person in a company (5marks)

Answer 1

When the CEO is also the chairman, a conflict of interest arises, as the CEO is voting on his or her own compensation. Although a board is required by legislation to have some members who are independent of management, the chair can influence the activities of the board, which allows for abuse of the chair position.