Well now a day student can really think especially when it comes to imaginative question like the above.
If you know my style, the answer is always Yes or No !
When a Chairman retired or before the chairman retired the Company must have a succession plan. The Nomination Committee should plan for this as this is one of the functions of Nomination committee as the governing committee for nomination of Directors and Chairman.
Before a CEO is nominated to replace the Chairman on temporary or permanent basis, the nomination committee of the Board should evaluate whether there are other more suitable candidate.
For example, there is a senior independent Director in the Company, he/she should be the first choice to hold the position of Chairman on a temporary basis prior to the appointment of new Chairman. Don’t forget that the Senior independent director is also a very important position for a Company. He/She is seen to be the communication channel between the Board and the Shareholder and he is the main representative for all the minority shareholder in the Company.
Therefore in my view, the Senior Independent director should be the first choice for the succession on temporary or permanent basis. If the Company does not have the Senior independent director, well the next should be the independent director. We should encourage an independent director to be the chairman instead of the CEO.
Well in simple unless you don’t have any choice as the above (which I think is impossible ) then you appoint the CEO, why it is because of the spirit of CG.
Sunday, March 1, 2009
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